The concept of inflation and its essence

Ever since our economy and manyother countries has acquired a market nature, the role of money has increased significantly. It became much more dependent on them than before. They are the main element of such a phenomenon as inflation.

This process is characterized by analysts as oneof the most painful in the sphere of finance and money circulation. In general, the notion of inflation implies a rise in the general level of prices in the country. This is not the only criterion that characterizes this phenomenon, but it is the main one.

The concept of inflation can be supplemented with the following properties:

• depreciation of money;
• imbalance of supply and demand;
• a decrease in the purchasing power of money.

Thus, this economic processincludes several basic characteristics. At the same time, they are similar (with slight differences) for both open and hidden inflation. Briefly describe each of these two types.

The concept of open inflation impliesis mainly a price increase (significant or insignificant) on goods and services. Closed the same type exists usually in a non-market economy.

For the first time this term was applied as early as 1861year by North American economists. Translated from the Latin word inflatio means something like "swelling". So during the Civil War, the process of so-called swelling of commodity-money circulation was characterized.

Thus, the concept and essence of inflation can beConsider open, albeit in general terms. It is important, however, in addition to learn about the causes of this phenomenon. There are a lot of them, and each time they can be different. In this case, consider the most "influential" and obvious ones. So, this is:

• budget deficit;
• issue of money;
• excess of money supply over commodity;
• excessive growth of wages;
• excessive investment and uncontrolled investments.

It is important, among other things, to say thatcauses of inflation can be both internal and external. The latter include, for example, too much public debt to other countries.

The concept of inflation, as well as its causes, is far from beingall that is necessary to know about this economic phenomenon. It is interesting that it can have a very different character of the "course of the disease." Scientists-economists distinguish several basic types (in addition to open and closed) inflation. It happens:

• galloping / hyperinflation / creeping;
• balanced / unbalanced;
• unexpected / expected;
• imported;
• other.

Let's also note that inflation is not a purely monetary phenomenon. It also affects the social sphere of society.

All these and other important issuesone of the most serious sciences is economics. Inflation, the concept of which was discussed above, has become one of the most urgent problems to date. For the reason that it can be one of the factors of the onset of the economic crisis, the study of its prerequisites and the search for methods for preventing it are being undertaken by scientists around the world today.

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