Definition, Causes and Impact of Inflation on a Country 2022
Inflation that occurred in various countries in 2022 has become one of the hot topics that are often discussed by the public lately.
How not, the inflation that occurred in several countries in 2022 was quite large, for example in the United States in June 2022 it was reported that inflation reached 9.1%, this figure was the largest since 1981.
Apart from the United States, one of the countries that experienced high inflation was Sri Lanka. Inflation that occurred in Sri Lanka even reached 60%.
Definition of Inflation
What exactly is inflation? What are the causes and effects on a country? Here we summarize the explanation below.
Inflation is an increase in the prices of goods and services in general and continuously over a certain period of time.
While the opposite of inflation is deflation, which means a decrease in the price of goods and services continuously within a certain period of time.
Causes of Inflation
Inflation that occurs in a country can occur due to various factors and causes, one of the causes that often results in inflation in a country is an increase in the amount of money in circulation.
In addition to an increase in the money supply, inflation can also occur due to pressure from the supply side (cost push inflation), from the demand side (demand pull inflation), and from inflation expectations.
Inflation Impact
The occurrence of inflation in a country usually results in such a large impact on that country.
The impact of high inflation in a country can result in people's real income will continue to fall, and result in people's living standards will also fall.
The impact of the people's real income that continues to fall will make the poor people poorer.
