Economic Inflation, Causes, and Control Methods

The economic inflation is about the rise in the costs of services or products to a certain state, and hence, the rise in the prices. Where, the economy here depends on more payment for its gross product without receiving anything in return.

What is the mechanism where the economic inflation process occurs?

Generally, the tradable cash or cash alternatives (such as securities or credits) submitted in the world stock exchange as a product or a company value, is being presented as tradable and interchangeable dues in return of intangible wealth or business. However, in fact, this cash will be in possession of the recipient without making a taking process, and these dues will be about tax to be added to the product prices and the paid amounts. Consequently, the process of inflation in prices would start, which may grow considerably like cancer, and lead to the recession of tangible products or services. Therefore, the output will be a business depression concurrently with the inflation period, and in contrast, the sums of money will widely increase to the actual beneficiaries of the inflation results due to significant percentages of withdrawal from the gross of cash liquidity.

By the end of the course, participants will be able to:

Does the increase of growth rate cause the increase of economic inflation?
 
The cash expansion helps to enhance the diseconomy rapidly in the case that its share of cash supplies is significant. Therefore, the real efforts towards stimulating comprehensive growth under this circumstances where the diseconomy components prevail, will definitely lead to the increased inflation rates.

What are the required methods of dealing with and controlling the economic inflation?:

- Producing further physical commodities through developing the production process via technical and technological progress.

- Identifying certain kinds of these commodities, and to be financially supported and provided with funds and the proper investment (sometimes like in energy and drug companies).

- Increasing taxes on usurious incomes where the beneficiaries of inflation deal, therefore, they will contribute to the economic inflation control.