essay on topic rising prices

Essay on Rising Prices

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100 Words Essay on Rising Prices

The phenomenon of rising prices.

Rising prices are a global issue affecting everyone. It refers to the increase in the cost of goods and services over time.

Causes of Rising Prices

Key causes include inflation, demand-supply imbalance, and increased production costs.

Effects of Rising Prices

Rising prices can decrease the purchasing power of money, making life difficult for people, especially those with fixed incomes.

Controlling Rising Prices

Government policies, like controlling inflation and balancing demand-supply, can help manage rising prices.

250 Words Essay on Rising Prices

Introduction.

The phenomenon of rising prices is a universal issue, influencing economies globally. This economic situation, also known as inflation, is a double-edged sword, with both negative and positive implications.

The Causes of Rising Prices

The primary causes of rising prices are supply and demand, cost of production, and government policy. When demand exceeds supply, prices rise. Similarly, an increase in production costs leads to a rise in the price of goods. Government policies, such as taxation or interest rates, can also influence prices.

Effects on the Economy

Inflation can stimulate economic growth by encouraging spending and investment due to the anticipation of higher future prices. However, uncontrolled inflation can lead to economic instability. It erodes the purchasing power of money, creating a burden for consumers, especially those with fixed incomes.

Managing Rising Prices

Effective management of rising prices is crucial. Central banks often use monetary policy tools, like adjusting interest rates, to maintain price stability. Governments can also implement fiscal policies, such as taxation and government spending, to control inflation.

While rising prices are an integral part of economic growth, they must be carefully managed to prevent detrimental effects on the economy. Understanding the causes and effects of inflation is essential for devising effective strategies to maintain economic stability.

500 Words Essay on Rising Prices

In the contemporary economic landscape, one of the most pressing issues is the incessant rise in prices. This phenomenon, often referred to as inflation, is a complex interplay of various factors, including market dynamics, government policies, and global economic conditions.

Driving Forces Behind Rising Prices

At the heart of rising prices is the economic principle of supply and demand. When demand for goods and services exceeds supply, prices tend to rise. This can be due to factors such as increased consumer spending, economic growth, or supply chain disruptions. Additionally, production costs – including wages, raw materials, and energy – also significantly contribute to price levels. When these costs increase, businesses often pass them onto consumers in the form of higher prices.

The Role of Monetary Policy

Monetary policy plays a crucial role in managing inflation. Central banks, such as the Federal Reserve in the United States, use tools like interest rates to control the money supply. When the economy is overheating, central banks might raise interest rates to reduce borrowing and spending, thereby curbing inflation. Conversely, during economic downturns, they may lower rates to stimulate spending and prevent deflation.

Global Economic Conditions and Rising Prices

In an increasingly interconnected world, global economic conditions significantly impact local price levels. For instance, if a major oil-producing country faces a crisis, oil prices globally can skyrocket. Similarly, global economic crises or pandemics can disrupt supply chains, leading to scarcity of goods and subsequent price hikes.

The Impact of Rising Prices

Rising prices have a profound impact on society. While moderate inflation is a sign of a healthy economy, high inflation erodes purchasing power, making it harder for people, especially those on fixed incomes, to afford goods and services. It can also create economic uncertainty, leading to reduced investment and slower economic growth.

However, rising prices aren’t necessarily negative. They can incentivize producers to increase supply, driving economic growth. Moreover, moderate inflation can help reduce the real burden of debt, as the value of money decreases over time.

Conclusion: Navigating the Challenge of Rising Prices

Addressing the issue of rising prices requires a delicate balance. Policymakers must carefully manage the money supply, while also promoting economic growth and stability. They must also consider the global economic landscape and how it influences local price levels.

While rising prices pose challenges, they are also an integral part of our economic system. Understanding the factors driving price increases and their implications can help us navigate these challenges and make informed decisions, both as individuals and as a society.

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Here's how rising inflation is affecting us around the world

Costing us dearly ... people around the world are feeling the squeeze as the prices rise. Image:  REUTERS/Natalia Favre

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Stay up to date:.

• Inflation is pushing up the prices of essential goods such as food, transport and utilities.
• More than two-thirds of people around the world are feeling the squeeze, according to new research.
• As the cost of living rises, the poorest in society are suffering most.

Ipsos surveyed over 20,000 people in 30 countries and found that at least half also reported increases in the cost of clothing and shoes, housing, healthcare and entertainment. Two-fifths of respondents expected prices to continue rising for at least the next three months.

Experts say the price of oil is a major driver of inflation because it is used to make and deliver goods.

But shortages of raw materials and finished products caused by the economic recovery after lockdowns have also been blamed.

Around the world, seven out of 10 people in the Ipsos survey said they had experienced rising prices for vehicle fuel, car payments, maintenance, parking and public transport, as well as groceries, meals and restaurants.

Have you read?

Global food prices are at a level not seen for most of modern history - this is why, this is how inflation rates are increasing around the world, this is what the world is worrying about right now.

Two-thirds said they had seen their utility costs go up - including electricity, gas, water, phone and internet charges. While 55% said clothing and shoes were more expensive, 51% reported higher housing, medical and healthcare pricing and 49% said entertainment had become more costly.

Inflation is toughest on the poorest people in society, the US Congress Joint Economic Committee confirmed in a November 2021 report . The lowest-earning 20% of US households spend 4.5 times more of their income on housing and food and 3.5 times more on transportation than those in the top 20%, it said.

Reporting rising prices

The nation with the greatest number of people worried about rising inflation was Argentina where the official annual inflation rate hit 52.5% in October 2021, according to Reuters .

The nations where fewest people reported rising prices were Japan, where consumer price inflation was 0.1% in October, and China, where the same month’s figure was 1.5% .

Fears about continuing price rises were strongest among women and under-35s , according to Ipsos, with upper-income groups expressing the most concern.

Data from international organizations bears out many of the perceptions revealed in the survey. The UN Food and Agriculture Organization says global food prices rose by 27.3% in the 12 months to November 2021 .

The first global pandemic in more than 100 years, COVID-19 has spread throughout the world at an unprecedented speed. At the time of writing, 4.5 million cases have been confirmed and more than 300,000 people have died due to the virus.

As countries seek to recover, some of the more long-term economic, business, environmental, societal and technological challenges and opportunities are just beginning to become visible.

To help all stakeholders – communities, governments, businesses and individuals understand the emerging risks and follow-on effects generated by the impact of the coronavirus pandemic, the World Economic Forum, in collaboration with Marsh and McLennan and Zurich Insurance Group, has launched its COVID-19 Risks Outlook: A Preliminary Mapping and its Implications - a companion for decision-makers, building on the Forum’s annual Global Risks Report.

Companies are invited to join the Forum’s work to help manage the identified emerging risks of COVID-19 across industries to shape a better future. Read the full COVID-19 Risks Outlook: A Preliminary Mapping and its Implications report here , and our impact story with further information.

Future outlook for inflation

The Organization for Economic Cooperation and Development says inflation in its 38 member states will reach 5.21% at the end of 2021 and, in the US, inflation hit a 30-year high of 6.2% in November 2021 .

But what about the year ahead? The International Monetary Fund says it expects global inflation to fall back in 2022 once the effects of steep rises in sectors like energy have worked through the figures.

However, contributors to the World Economic Forum’s Chief Economists’ Outlook in November 2021 disagreed about whether inflation would prove temporary or become a major headache for the global economy in 2022.

But they added a warning that in lower- and middle-income countries with less stable central banks, price pressures had been building more quickly throughout 2021 and were “at a greater risk of getting out of hand”.

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World Economic Forum articles may be republished in accordance with the Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International Public License, and in accordance with our Terms of Use.

The views expressed in this article are those of the author alone and not the World Economic Forum.

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Essay on Inflation: Types, Causes and Effects

Essay on Inflation!

Essay on the Meaning of Inflation:

Inflation and unemployment are the two most talked-about words in the contemporary society. These two are the big problems that plague all the economies. Almost everyone is sure that he knows what inflation exactly is, but it remains a source of great deal of confusion because it is difficult to define it unambiguously.

Inflation is often defined in terms of its supposed causes. Inflation exists when money supply exceeds available goods and services. Or inflation is attributed to budget deficit financing. A deficit budget may be financed by additional money creation. But the situation of monetary expansion or budget deficit may not cause price level to rise. Hence the difficulty of defining ‘inflation’ .

Inflation may be defined as ‘a sustained upward trend in the general level of prices’ and not the price of only one or two goods. G. Ackley defined inflation as ‘a persistent and appreciable rise in the general level or average of prices’ . In other words, inflation is a state of rising price level, but not rise in the price level. It is not high prices but rising prices that constitute inflation.

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It is an increase in the overall price level. A small rise in prices or a sudden rise in prices is not inflation since these may reflect the short term workings of the market. It is to be pointed out here that inflation is a state of disequilibrium when there occurs a sustained rise in price level.

It is inflation if the prices of most goods go up. However, it is difficult to detect whether there is an upward trend in prices and whether this trend is sustained. That is why inflation is difficult to define in an unambiguous sense.

Let’s measure inflation rate. Suppose, in December 2007, the consumer price index was 193.6 and, in December 2008 it was 223.8. Thus the inflation rate during the last one year was 223.8 – 193.6/193.6 × 100 = 15.6%.

As inflation is a state of rising prices, deflation may be defined as a state of falling prices but not fall in prices. Deflation is, thus, the opposite of inflation, i.e., rise in the value or purchasing power of money. Disinflation is a slowing down of the rate of inflation.

Essay on the Types of Inflation :

As the nature of inflation is not uniform in an economy for all the time, it is wise to distinguish between different types of inflation. Such analysis is useful to study the distributional and other effects of inflation as well as to recommend anti-inflationary policies.

Inflation may be caused by a variety of factors. Its intensity or pace may be different at different times. It may also be classified in accordance with the reactions of the government toward inflation.

Thus, one may observe different types of inflation in the contemporary society:

(a) According to Causes:

i. Currency Inflation:

This type of inflation is caused by the printing of currency notes.

ii. Credit Inflation:

Being profit-making institutions, commercial banks sanction more loans and advances to the public than what the economy needs. Such credit expansion leads to a rise in price level.

iii. Deficit-Induced Inflation:

The budget of the government reflects a deficit when expenditure exceeds revenue. To meet this gap, the government may ask the central bank to print additional money. Since pumping of additional money is required to meet the budget deficit, any price rise may be called deficit-induced inflation.

iv. Demand-Pull Inflation:

An increase in aggregate demand over the available output leads to a rise in the price level. Such inflation is called demand-pull inflation (henceforth DPI). But why does aggregate demand rise? Classical economists attribute this rise in aggregate demand to money supply.

If the supply of money in an economy exceeds the available goods and services, DPI appears. It has been described by Coulborn as a situation of “too much money chasing too few goods” .

Note that, in this region, price level begins to rise. Ultimately, the economy reaches full employment situation, i.e., Range 3, where output does not rise but price level is pulled upward. This is demand-pull inflation. The essence of this type of inflation is “too much spending chasing too few goods.”

v. Cost-Push Inflation:

Inflation in an economy may arise from the overall increase in the cost of production. This type of inflation is known as cost-push inflation (henceforth CPI). Cost of production may rise due to increase in the price of raw materials, wages, etc. Often trade unions are blamed for wage rise since wage rate is not market-determined. Higher wage means higher cost of production.

Prices of commodities are thereby increased. A wage-price spiral comes into operation. But, at the same time, firms are to be blamed also for the price rise since they simply raise prices to expand their profit margins. Thus we have two important variants of CPI: wage-push inflation and profit-push inflation. Anyway, CPI stems from the leftward shift of the aggregate supply curve.

The price level thus determined is OP 1 . As aggregate demand curve shifts to AD 2 , price level rises to OP 2 . Thus, an increase in aggregate demand at the full employment stage leads to an increase in price level only, rather than the level of output. However, how much price level will rise following an increase in aggregate demand depends on the slope of the AS curve.

Causes of Demand-Pull Inflation :

DPI originates in the monetary sector. Monetarists’ argument that “only money matters” is based on the assumption that at or near full employment, excessive money supply will increase aggregate demand and will thus cause inflation.

An increase in nominal money supply shifts aggregate demand curve rightward. This enables people to hold excess cash balances. Spending of excess cash balances by them causes price level to rise. Price level will continue to rise until aggregate demand equals aggregate supply.

Keynesians argue that inflation originates in the non-monetary sector or the real sector. Aggregate demand may rise if there is an increase in consumption expenditure following a tax cut. There may be an autonomous increase in business investment or government expenditure. Governmental expenditure is inflationary if the needed money is procured by the government by printing additional money.

In brief, an increase in aggregate demand i.e., increase in (C + I + G + X – M) causes price level to rise. However, aggregate demand may rise following an increase in money supply generated by the printing of additional money (classical argument) which drives prices upward. Thus, money plays a vital role. That is why Milton Friedman believes that inflation is always and everywhere a monetary phenomenon.

There are other reasons that may push aggregate demand and, hence, price level upwards. For instance, growth of population stimulates aggregate demand. Higher export earnings increase the purchasing power of the exporting countries.

Additional purchasing power means additional aggregate demand. Purchasing power and, hence, aggregate demand, may also go up if government repays public debt. Again, there is a tendency on the part of the holders of black money to spend on conspicuous consumption goods. Such tendency fuels inflationary fire. Thus, DPI is caused by a variety of factors.

Cost-Push Inflation Theory :

In addition to aggregate demand, aggregate supply also generates inflationary process. As inflation is caused by a leftward shift of the aggregate supply, we call it CPI. CPI is usually associated with the non-monetary factors. CPI arises due to the increase in cost of production. Cost of production may rise due to a rise in the cost of raw materials or increase in wages.

Such increases in costs are passed on to consumers by firms by raising the prices of the products. Rising wages lead to rising costs. Rising costs lead to rising prices. And rising prices, again, prompt trade unions to demand higher wages. Thus, an inflationary wage-price spiral starts.

This causes aggregate supply curve to shift leftward. This can be demonstrated graphically (Fig. 11.4) where AS 1 is the initial aggregate supply curve. Below the full employment stage this AS curve is positive sloping and at full employment stage it becomes perfectly inelastic. Intersection point (E 1 ) of AD 1 and AS 1 curves determines the price level.

Now, there is a leftward shift of aggregate supply curve to AS 2 . With no change in aggregate demand, this causes price level to rise to OP 2 and output to fall to OY 2 .

With the reduction in output, employment in the economy declines or unemployment rises. Further shift in the AS curve to AS 2 results in higher price level (OP 3 ) and a lower volume of aggregate output (OY 3 ). Thus, CPI may arise even below the full employment (Y f ) stage.

Causes of CPI :

It is the cost factors that pull the prices upward. One of the important causes of price rise is the rise in price of raw materials. For instance, by an administrative order the government may hike the price of petrol or diesel or freight rate. Firms buy these inputs now at a higher price. This leads to an upward pressure on cost of production.

Not only this, CPI is often imported from outside the economy. Increase in the price of petrol by OPEC compels the government to increase the price of petrol and diesel. These two important raw materials are needed by every sector, especially the transport sector. As a result, transport costs go up resulting in higher general price level.

Again, CPI may be induced by wage-push inflation or profit-push inflation. Trade unions demand higher money wages as a compensation against inflationary price rise. If increase in money wages exceeds labour productivity, aggregate supply will shift upward and leftward. Firms often exercise power by pushing up prices independently of consumer demand to expand their profit margins.

Fiscal policy changes, such as an increase in tax rates leads to an upward pressure in cost of production. For instance, an overall increase in excise tax of mass consumption goods is definitely inflationary. That is why government is then accused of causing inflation.

Finally, production setbacks may result in decreases in output. Natural disaster, exhaustion of natural resources, work stoppages, electric power cuts, etc., may cause aggregate output to decline.

In the midst of this output reduction, artificial scarcity of any goods by traders and hoarders just simply ignite the situation.

Inefficiency, corruption, mismanagement of the economy may also be the other reasons. Thus, inflation is caused by the interplay of various factors. A particular factor cannot be held responsible for inflationary price rise.

Essay on the Effects of Inflation :

People’s desires are inconsistent. When they act as buyers they want prices of goods and services to remain stable but as sellers they expect the prices of goods and services should go up. Such a happy outcome may arise for some individuals; “but, when this happens, others will be getting the worst of both worlds.” Since inflation reduces purchasing power it is bad.

The old people are in the habit of recalling the days when the price of say, meat per kilogram cost just 10 rupees. Today it is Rs. 250 per kilogram. This is true for all other commodities. When they enjoyed a better living standard. Imagine today, how worse we are! But meanwhile, wages and salaries of people have risen to a great height, compared to the ‘good old days’. This goes unusually untold.

When price level goes up, there is both a gainer and a loser. To evaluate the consequence of inflation, one must identify the nature of inflation which may be anticipated and unanticipated. If inflation is anticipated, people can adjust with the new situation and costs of inflation to the society will be smaller.

In reality, people cannot predict accurately future events or people often make mistakes in predicting the course of inflation. In other words, inflation may be unanticipated when people fail to adjust completely. This creates various problems.

One can study the effects of unanticipated inflation under two broad headings:

(i) Effect on distribution of income and wealth

(ii) Effect on economic growth.

(a) Effects of Inflation on Income and Wealth Distribution :

During inflation, usually people experience rise in incomes. But some people gain during inflation at the expense of others. Some individuals gain because their money incomes rise more rapidly than the prices and some lose because prices rise more rapidly than their incomes during inflation. Thus, it redistributes income and wealth.

Though no conclusive evidence can be cited, it can be asserted that following categories of people are affected by inflation differently:

i. Creditors and Debtors:

Borrowers gain and lenders lose during inflation because debts are fixed in rupee terms. When debts are repaid their real value declines by the price level increase and, hence, creditors lose. An individual may be interested in buying a house by taking a loan of Rs. 7 lakh from an institution for 7 years.

The borrower now welcomes inflation since he will have to pay less in real terms than when it was borrowed. Lender, in the process, loses since the rate of interest payable remains unaltered as per agreement. Because of inflation, the borrower is given ‘dear’ rupees, but pays back ‘cheap’ rupees.

However, if in an inflation-ridden economy creditors chronically loose, it is wise not to advance loans or to shut down business. Never does it happen. Rather, the loan- giving institution makes adequate safeguard against the erosion of real value.

ii. Bond and Debenture-Holders:

In an economy, there are some people who live on interest income—they suffer most.

Bondholders earn fixed interest income:

These people suffer a reduction in real income when prices rise. In other words, the value of one’s savings decline if the interest rate falls short of inflation rate. Similarly, beneficiaries from life insurance programmes are also hit badly by inflation since real value of savings deteriorate.

iii. Investors:

People who put their money in shares during inflation are expected to gain since the possibility of earning business profit brightens. Higher profit induces owners of firms to distribute profit among investors or shareholders.

iv. Salaried People and Wage-Earners:

Anyone earning a fixed income is damaged by inflation. Sometimes, unionized worker succeeds in raising wage rates of white-collar workers as a compensation against price rise. But wage rate changes with a long time lag. In other words, wage rate increases always lag behind price increases.

Naturally, inflation results in a reduction in real purchasing power of fixed income earners. On the other hand, people earning flexible incomes may gain during inflation. The nominal incomes of such people outstrip the general price rise. As a result, real incomes of this income group increase.

v. Profit-Earners, Speculators and Black Marketeers:

It is argued that profit-earners gain from inflation. Profit tends to rise during inflation. Seeing inflation, businessmen raise the prices of their products. This results in a bigger profit. Profit margin, however, may not be high when the rate of inflation climbs to a high level.

However, speculators dealing in business in essential commodities usually stand to gain by inflation. Black marketeers are also benefited by inflation.

Thus, there occurs a redistribution of income and wealth. It is said that rich becomes richer and poor becomes poorer during inflation. However, no such hard and fast generalizations can be made. It is clear that someone wins and someone loses from inflation.

These effects of inflation may persist if inflation is unanticipated. However, the redistributive burdens of inflation on income and wealth are most likely to be minimal if inflation is anticipated by the people.

With anticipated inflation, people can build up their strategies to cope with inflation. If the annual rate of inflation in an economy is anticipated correctly people will try to protect them against losses resulting from inflation.

Workers will demand 10 p.c. wage increase if inflation is expected to rise by 10 p.c. Similarly, a percentage of inflation premium will be demanded by creditors from debtors. Business firms will also fix prices of their products in accordance with the anticipated price rise. Now if the entire society “learns to live with inflation” , the redistributive effect of inflation will be minimal.

However, it is difficult to anticipate properly every episode of inflation. Further, even if it is anticipated it cannot be perfect. In addition, adjustment with the new expected inflationary conditions may not be possible for all categories of people. Thus, adverse redistributive effects are likely to occur.

Finally, anticipated inflation may also be costly to the society. If people’s expectation regarding future price rise become stronger they will hold less liquid money. Mere holding of cash balances during inflation is unwise since its real value declines. That is why people use their money balances in buying real estate, gold, jewellery, etc.

Such investment is referred to as unproductive investment. Thus, during inflation of anticipated variety, there occurs a diversion of resources from priority to non-priority or unproductive sectors.

b. Effect on Production and Economic Growth :

Inflation may or may not result in higher output. Below the full employment stage, inflation has a favourable effect on production. In general, profit is a rising function of the price level. An inflationary situation gives an incentive to businessmen to raise prices of their products so as to earn higher doses of profit.

Rising price and rising profit encourage firms to make larger investments. As a result, the multiplier effect of investment will come into operation resulting in higher national output. However, such a favourable effect of inflation will be temporary if wages and production costs rise very rapidly.

Further, inflationary situation may be associated with the fall in output, particularly if inflation is of the cost-push variety. Thus, there is no strict relationship between prices and output. An increase in aggregate demand will increase both prices and output, but a supply shock will raise prices and lower output.

Inflation may also lower down further production levels. It is commonly assumed that if inflationary tendencies nurtured by experienced inflation persist in future, people will now save less and consume more. Rising saving propensities will result in lower further outputs.

One may also argue that inflation creates an air of uncertainty in the minds of business community, particularly when the rate of inflation fluctuates. In the midst of rising inflationary trend, firms cannot accurately estimate their costs and revenues. Under the circumstance, business firms may be deterred in investing. This will adversely affect the growth performance of the economy.

However, slight dose of inflation is necessary for economic growth. Mild inflation has an encouraging effect on national output. But it is difficult to make the price rise of a creeping variety. High rate of inflation acts as a disincentive to long run economic growth. The way the hyperinflation affects economic growth is summed up here.

We know that hyperinflation discourages savings. A fall in savings means a lower rate of capital formation. A low rate of capital formation hinders economic growth. Further, during excessive price rise, there occurs an increase in unproductive investment in real estate, gold, jewellery, etc.

Above all, speculative businesses flourish during inflation resulting in artificial scarcities and, hence, further rise in prices. Again, following hyperinflation, export earnings decline resulting in a wide imbalance in the balance of payments account.

Often, galloping inflation results in a ‘flight’ of capital to foreign countries since people lose confidence and faith over the monetary arrangements of the country, thereby resulting in a scarcity of resources. Finally, real value of tax revenue also declines under the impact of hyperinflation. Government then experiences a shortfall in investible resources.

Thus, economists and policy makers are unanimous regarding the dangers of high price rise. But the consequence of hyperinflation is disastrous. In the past, some of the world economies (e.g., Germany after the First World War (1914-1918), Latin American countries in the 1980s) had been greatly ravaged by hyperinflation.

The German Inflation of 1920s was also Catastrophic:

During 1922, the German price level went up 5,470 per cent, in 1923, the situation worsened; the German price level rose 1,300,000,000 times. By October of 1923, the postage of the lightest letter sent from Germany to the United States was 200,000 marks.

Butter cost 1.5 million marks per pound, meat 2 million marks, a loaf of bread 200,000 marks, and an egg 60,000 marks Prices increased so rapidly that waiters changed the prices on the menu several times during the course of a lunch!! Sometimes, customers had to pay double the price listed on the menu when they observed it first!!!

During October 2008, Zimbabwe, under the President-ship of Robert G. Mugabe, experienced 231,000,000 p.c. (2.31 million p.c.) as against 1.2 million p.c. price rise in September 2008—a record after 1923. It is an unbelievable rate. In May 2008, the cost of price of a toilet paper itself and not the costs of the roll of the toilet paper came to 417 Zimbabwean dollars.

Anyway, people are harassed ultimately by the high rate of inflation. That is why it is said that ‘inflation is our public enemy number one’. Rising inflation rate is a sign of failure on the part of the government.

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Essay on Rising Prices in English for Students and Childrens

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Essay on Rising Prices/Price Hike in English for Children and Students

Essay on Rising Prices/Price Hike in English: Price rise or price hike are the terms used to denote rise in price of goods and services. The economic term for rising prices or price hike is “inflation”. Fluctuations in prices of goods and services are common in world economies; though, it directly affects the consumer. While a drop in prices is good news for middle and lower class consumers; an increase might cause financial constraints to them. A price hike in the items consumed daily in the households, affects the consumer more. Such items include, fruits, vegetables, oils, LPG Cylinders, etc. Every price hike on an individual item affects a specific set of consumers, like, a hike in fuel price; affect the transport industry more than private users.

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Long and Short Essay on Rising Prices/Price Hike in English

• We are providing below long and short essay on rising prices or price hike in English.
• These essays have been written in simple and easy to remember language to let you use them whenever required.
• The rising prices or price hike essay will give you an insight of reasons and effects of price hike on general masses.
• You can use these essays in your school assignments and various other competitions or general debates on the topic of rising price or price hike.

Essay on Price Hike in India and Common Man 200 words

Price hike is a common phenomenon and happens in most economies. It is a reality in India as well. However, this reality isn’t only because of the natural progress of economics but also because of governmental policies and taxation, all of which contribute to the price of goods and services that eventually reach the common man.

Price Hike and the Common Man

For the common man, a hike in prices is always a matter of some concern. He has to make constant readjustments to his monthly budget and even give up using certain products and services since he can no longer afford them. Add in the fact that salaries don’t increase at a commensurate rate and the ability of the common man to afford many things goes down significantly.

What is also a matter of concern is that when the price of certain items is hiked, prices of other essential goods and services also go up. For example, if the price of petrol or diesel is hiked, the common man has to adjust that in his budget. But this increase in prices also means increased prices for public transport and goods that are transported across the country using petrol or diesel fuelled transport. In other words, because the price of petrol increases, the price of vegetables and grains may also increase.

Essay on Rising Prices Inflation 250 words

When the prices of goods and commodities increase over a period of time in a sustained manner, the phenomenon is called inflation. It is measured in terms of an annual percentage change in a price index, which is normally the consumer price index. In simple terms, inflation means that your purchasing power is reduced and a rupee doesn’t go as far as it used to. Therefore, when the value of money goes down and prices rise, you have inflation.

Causes of Rising Prices Inflation

While academics and economists haven’t agreed on one particular theory about the cause of inflation, they generally agree that certain factors are responsible for it.

• Demand Pull Inflation – As the name suggests, this happens when demand exceeds supply. There is an increase in demand for products and services and due to this increased demand, prices go up. The phenomenon is usually observed in economies that are experiencing rapid growth
• Cost Push Inflation – This comes from the supply side. When a company’s cost of production increases, it compensates by increasing the prices of its goods and services, so that it can maintain its profit margin. Production costs can go up because the cost of the raw materials goes up or because of taxation or because of increased wages to its workers.
• Monetary Inflation – As per this theory, when money is oversupplied in an economy, inflation occurs. Since money is also ruled by supply and demand, too much money circulating makes its value go down and therefore, prices go up.

Essay on Problems of Rising Prices – Essay 300 words

As a developing country with the second largest population in the world, India faces quite a few challenges. One of these is rising prices and it is by far the most immediate problem. Because a large part of the Indian population lives on or below the poverty line, this issue impacts them severely. In addition, the middle class is also facing greater problems because of prices rising.

What Rising Prices Do

It has commonly been held that price rises are a normal part of a growing economy. This is true to some extent. However, recent years have seen exponential hikes in prices – hikes that are affecting those Indians who were already at subsistence level. The number of people living below the poverty line is actually increasing instead of decreasing.

Another segment of society that is affected by rising prices is the middle class. A robust part of society, the middle class, now finds itself struggling to make ends meet. These are people who earn a fixed income; they are the salaried class. Unfortunately, their salaries are unable to keep up with the constant increases in prices of necessary goods and commodities. As a result, the gap between the haves and the have-nots increases day by day.

Whenever such a situation continues for some time, unrest is inevitable. As wage earners find themselves facing the problems price hikes bring, they start agitating against their employers. This, in turn, brings a halt to productivity, causing shortage of goods and commensurate rise in prices. The whole thing becomes a vicious circle.

Essay on Rising Prices/Price Hike of Essential Commodities 400 words

In India, certain commodities have been classified as essential commodities as per the Essential Commodities Act 1955. These commodities include but aren’t limited to oil cakes, cattle fodder, components of automobiles, coal, certain drugs, woollen and cotton textiles, edible oils, steel and iron, products manufactured from steel and iron, petroleum and its products, paper, food crops and raw cotton. These commodities are essential to both the population of the country and to its economy. Therefore, any shortfall can result in high prices quickly.

Rising Prices of Essential Commodities

Over the past few years, these essential commodities have seen price rises ranging from 72 percent to 158 percent. The hikes in price are caused by both the demand and the supply of these commodities.

India’s increasing population is one of the main factors in price hikes. The demand exceeds the supply by a huge margin and the demand keeps growing as the population increases. In addition, changing habits have increased the demand for certain commodities well beyond what can be supplied.

From a supply perspective, factors such as uncertain weather, lack of cold storage and lack of warehousing facilities play a huge role in pushing prices up. A very high percentage of vegetables and fruits wasted because of inadequate cold storage facilities, affecting supply and raising prices.

Commodities such as petroleum, which imported to a large extent, are subject to international prices. Therefore, the moment there is global shortage or global price hike, these commodities become dearer.

Artificial gaps in supply are created by unscrupulous operators such as black marketers, hoarders, and traditional traders. By holding back these commodities, they are able to create a bigger demand and thus, an increase in prices.

Since these commodities are essential, price hikes have both economic and political consequences. The price rises become part of the political agenda for opposition parties to attack the government. By doing this, they attempt to show solidarity with the common man. However, there is no doubt in the fact that it is the common man who is the one most deeply affected at the end of the day. Sweeping reforms needed to control hoarders and reform agriculture in a way that price hikes for essential commodities don’t hit the common man where it hurts most – his wallet.

Essay on Rising Prices/Price Hike Causes and its Effects 500 words

There is no denying the fact that the Indian economy is one of the world’s largest economies. It has recently superseded China as the fastest growing large economy and ranks third in Gross Domestic Product in terms of Purchasing Power Parity. While these statistics are good, the Indian economy is also facing many challenges, one of which is rising prices.

Causes of Rising Prices

The factors that cause prices to rise are twofold – internal and external.

Global inflation is an external cause of price rise. When the prices of certain goods abroad are higher, importing these goods costs more. This increased cost passed on to the consumer directly and indirectly. For example, when oil prices rise globally, it becomes more expensive to import oil. In turn, this affects the prices of oil products such as petroleum and diesel in our country. The consumer then has to pay higher prices to get these products. Since these are products that used in transportation, costs of goods transported also increase. Therefore, goods such as foodstuffs and other necessities also become more expensive.

These are factors that caused by the economic and political situations inside the country. There are various internal factors that cause a hike in prices. Some of them are:

• Rapid Population Growth

An increasing population demands an increasing amount of goods. Demand increases and supply can’t keep up, thus driving the prices higher.

• Income Increase

As the purchasing power of the population increases, the demand for goods and services also increases. Again, the demand outstrips the supply and prices go up.

• Insufficient Agricultural Output

Thanks to a growing population and increase in purchasing power, the demand for agricultural goods has increased. However, because this sector has neglected to a significant degree, it cannot keep up with the demand. A drought or a flood is enough to disrupt supply and increase prices.

• Insufficient Industrial Production

The industrial sector has fared better at the hands of the government. However, industrial growth rate has only increased in the last 30 or so years. Therefore, certain industrial products such as basic consumer products and agricultural and industrial inputs have not been able to keep up with the demand which has resulted in a price hike.

Essay on Rising Prices/Price Hike Effects

An increase in prices inevitably affects the lives of the general population. When the prices of basic goods such as food increase, people who are living just above the subsistence level slip down below the poverty line. It also affects the pockets of the population that has fixed incomes. Prices go up but their wages remain the same and, therefore, they either forced to spend more or give up certain goods entirely. The rich not really affected by the price rise and therefore, the gap between the rich and the poor widens almost daily.

Essay on Rising Prices FAQs

What is the rising of prices.

Rising of prices, often referred to as inflation, is when the general level of prices for goods and services in an economy increases over a period, resulting in a decrease in the purchasing power of currency.

What are the problems of rising prices?

Problems associated with rising prices include reduced purchasing power for consumers, increased production costs for businesses, and potential economic instability.

What is the reason for the price increase?

Price increases can be caused by factors such as increased demand, supply shortages, changes in production costs, or monetary policies affecting the money supply.

Why prices are rising in India?

Prices can rise in India due to a variety of factors, including increased demand for goods and services, supply chain disruptions, rising production costs, and fluctuations in global commodity prices.

What is the problem of price rise in India?

The problem of price rise in India can lead to reduced affordability of essential goods and services, potentially impacting the standard of living for many people.

What are the effects of price rise in India?

The effects of price rise in India can include decreased purchasing power, reduced savings, and challenges in maintaining a stable economy and addressing poverty and inequality.

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Essay on Rising Prices

The price rise is a world phenomenon today and inflation is affecting every section (rich and poor) of society. Our country is also facing this problem. The prices of almost all essential goods are going up.

And prices once gone up never come down. This causes great hardship and difficulties for the people in the fixed income group or those belonging to the low-income group. Today there is no limit to the price rise.

In the pre-independence days, a clerk got only Rs. 60 per month, but now he gets about three thousand Pays have gone higher, but the employees are not satisfied.

They have large families to maintain and it becomes difficult to feed so many mouths with the value of the rupee falling constantly. There is a dearth of cheap accommodation and many people live in slums. The prices of clothes are also high and some people don’t even have enough money to buy these to cover themselves with.

The government of the day goes on imposing taxes after taxes on the already burdened citizens. This leads to a lot of money going into the national expenditure and into the pockets of corrupt leaders and officials. Black marketing also leads to heavy taxation as people conceal their actual income.

Production of agricultural goods should be increased along with industrial goods. Their prices should be fixed. The government should undertake to ration in cities and villages. Their prices should be fixed.

The government should undertake to ration in cities and villages. Cheap clothes should be produced and essential items are distributed through government shops.

Corruption must be ended at all levels. Corruption adds to the problem of prices. Bribing is common in most government offices and this also leads to the rise in the prices of goods.

For example, a job that can be done by paying a small amount needs more money because some officials would not do it till they get extra money for it.

This leads to an imbalance in the market and an addition to the burden of the common man. Rising prices are a problem that has to be tackled at all levels.

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Short Essay: Rising Prices

A couple of short essay examples on rising prices.

Table of Contents

Rising Prices Essay Example 1

Rising prices have become a significant concern for consumers and businesses alike. The cost of goods and services has been increasing rapidly, making it difficult for those with lower incomes to afford basic necessities. In this essay, we will explore the causes of rising prices, the impact it has on consumers and the economy, and what can be done to address this issue.

One of the primary factors that contribute to rising prices is inflation. Inflation occurs when the general level of prices for goods and services increases over time. This can happen when there is too much money in circulation, leading to an increase in demand for goods and services, which in turn drives up prices.

Another factor that contributes to rising prices is supply chain disruptions. This can happen when there is a shortage of raw materials, transportation issues or natural disasters that prevent goods from reaching their intended destinations. These disruptions can lead to a decrease in supply and an increase in prices.

Lastly, changes in consumer behavior can also contribute to rising prices. For example, if consumers suddenly start buying a particular product in large quantities, it can lead to a shortage of that product, which in turn drives up prices.

Rising prices can have negative effects on consumers, particularly those with lower incomes. When the cost of basic necessities like food and housing increases, it can be difficult for low-income families to make ends meet. This can lead to increased poverty and a decline in the standard of living.

Moreover, rising prices can also have an impact on businesses. Higher prices can lead to a decrease in demand for products and services, resulting in lower profits for businesses. This can lead to layoffs, reduced investment, and a decline in overall economic growth.

To address the issue of rising prices, governments can implement policies such as price controls or subsidies. Price controls limit the amount that businesses can charge for goods and services, while subsidies provide financial assistance to businesses to help them offset the cost of production.

Another way to address the issue of rising prices is to increase the supply of goods and services. Governments can invest in infrastructure projects to improve transportation and communication networks, which can help to reduce supply chain disruptions. Additionally, governments can encourage businesses to invest in research and development to create new products and increase competition in the marketplace.

In conclusion, rising prices are a complex issue with far-reaching consequences. While there are no easy solutions, governments and businesses must work together to address this issue. Through thoughtful policies and investments, we can help to ensure that goods and services remain affordable for all, and that our economy remains strong and stable.

Rising Prices Essay Example 2

Rising prices have become a significant concern for individuals and businesses worldwide. The increase in prices can be attributed to various factors, such as inflation, supply and demand imbalances, and changes in government policies. This essay will explore the causes and effects of rising prices and provide strategies for managing them.

One of the main causes of rising prices is inflation. Inflation occurs when the general level of prices in an economy increases, resulting in a decrease in the purchasing power of money. This can lead to a rise in the cost of goods and services, making it difficult for individuals and businesses to afford them. In addition, supply and demand imbalances can also contribute to rising prices. For instance, if demand for a particular product increases, and its supply remains constant, the price will go up. Similarly, if supply increases, and the demand remains constant, the price will go down. Finally, changes in government policies, such as taxes and tariffs, can also affect prices. For example, if the government imposes a tax on a particular product, the price of that product will increase.

The impact of rising prices can be felt by individuals and businesses alike. For individuals, rising prices can lead to a decrease in purchasing power, making it difficult to afford basic necessities such as food, housing, and healthcare. This can also result in a decrease in the standard of living. For businesses, rising prices can lead to reduced profitability, making it difficult to invest in new projects or expand operations. In addition, businesses may be forced to pass on the increased costs to consumers, resulting in a decrease in demand for their products or services.

To manage rising prices, individuals and businesses can adopt various strategies. For instance, budgeting can help individuals identify areas where they can cut costs and prioritize their spending. Seeking out lower-cost alternatives, such as generic brands or second-hand goods, can also help reduce expenses. Businesses can also explore ways to reduce costs, such as outsourcing or implementing cost-saving measures. Finally, individuals and businesses can advocate for policy changes that address underlying causes of rising prices, such as inflation or supply and demand imbalances.

Rising prices have become a significant concern for individuals and businesses worldwide. The increase in prices can be caused by various factors, such as inflation, supply and demand imbalances, and changes in government policies. The impact of rising prices can be felt by individuals and businesses, leading to decreased purchasing power and reduced profitability. Strategies for managing rising prices may include budgeting, seeking out lower-cost alternatives, and advocating for policy changes that address underlying causes. By adopting these strategies, individuals and businesses can mitigate the effects of rising prices and maintain their financial stability.

Rising Prices Essay Example 3

Rising prices have become a major concern for individuals and governments around the world. Prices of goods and services have been increasing steadily, which has affected the purchasing power of consumers. The cause of rising prices can be attributed to a number of factors such as inflation, supply and demand, and government policies. In this essay, we will explore the reasons behind the rising prices, the impact on consumers, and the overall economy.

The first reason for rising prices is inflation. Inflation is the rate at which the general level of prices for goods and services is rising, and subsequently, purchasing power is falling. Inflation can be caused by factors such as an increase in the money supply, a decrease in the supply of goods, and rising production costs. When the money supply increases, there is more money available to spend, which drives up demand and prices. On the other hand, when the supply of goods decreases, demand remains the same, but the price of the goods increases. Rising production costs such as labor, raw materials, and energy also contribute to higher prices.

The second reason for rising prices is the law of supply and demand. When a product is in high demand, producers can charge more for it, and the price will rise. Conversely, when there is an oversupply of a product, the price will fall. This can occur due to a change in consumer preferences, changes in technology or production methods, or changes in the availability of raw materials. Consumers may have to adjust their spending habits or budgets to accommodate rising prices, which can be challenging for those on a fixed income or with limited financial resources.

The third reason for rising prices is government policies. Governments can influence prices through various policies such as taxes and subsidies. For example, if the government increases taxes on a particular product, the price of that product will increase. Similarly, if the government provides subsidies to a particular industry, the price of goods produced by that industry may decrease. Rising prices can have a negative impact on low-income households, as they are more likely to be affected by price changes. In addition, rising prices can also affect the overall economy by reducing consumer spending and slowing down economic growth.

In conclusion, rising prices can be caused by various factors such as inflation, supply and demand, and government policies. Consumers may have to adjust their spending habits or budgets to accommodate these price changes, which can be challenging for those on a fixed income or with limited financial resources. Rising prices can also have a negative impact on low-income households and the overall economy. It is important for governments to monitor price changes and implement policies that can help stabilize prices and reduce the impact on consumers and the economy.

About Mr. Greg

Mr. Greg is an English teacher from Edinburgh, Scotland, currently based in Hong Kong. He has over 5 years teaching experience and recently completed his PGCE at the University of Essex Online. In 2013, he graduated from Edinburgh Napier University with a BEng(Hons) in Computing, with a focus on social media.

Mr. Greg’s English Cloud was created in 2020 during the pandemic, aiming to provide students and parents with resources to help facilitate their learning at home.

Whatsapp: +85259609792

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Essay Rising Prices: A Problem that Needs to be Addressed and Fixed

Prices of food articles are increasing day by day and there is a wide gap between wholesale prices and retail prices. The common man is suffering. The government is trying to control the prices. Write an article in 100-120 words on ` Rising Prices ‘ and give suggestions on how to control them. You may use the hints given below:

Hints : (40 percent below the poverty line, incomes of lower middle class very low, prices of food articles risen high, difficult to make both ends meet; steps were taken by the government; causes of rising prices; your suggestions).                                                                                                          

Ans.                                                                    Rising Prices

  What we can find as a major roadblock for our country’s economic progress are the rising prices. Almost every consumer-oriented commodity like food articles is now high in cost. The essential goods that we need for our day to day survival are increasing in price every week/ month. Milk, fruits vegetables, groceries and grains which we need every day are so high in price that there is no question of buying or even thinking of buying more of the goods. There is a wide gap in the prices between the wholesale and the retail market. Indeed the fact is that neither the producer nor the consumer benefits, in the end, thanks to the middlemen whose f business is thriving. In such a condition, we find it difficult to make both ends meet. The income of the lower middle class is very low to meet the minimum expenses of the family. If this is so, then the condition of the poor is still pathetic. With 40% of poverty in our country below the poverty line, we can say that almost half the population remains hungry for the most part of the day. In spite of government subsidies to farmers. Poverty still prevails and the prices of food articles remain high. The government should take a middle course wherein both produce and the consumer benefit, while the middlemen should not be the sole beneficiaries.

Article on Rising Prices in 100 Words

Rising prices is one of the most common problems that people face today. It is becoming difficult for people to manage their daily expenses within their monthly incomes. The main reason behind this problem is the inflation which has been constantly increasing over the past few years. Prices of goods and services are increasing at a faster rate than the incomes of people. There are various reasons behind this inflationary trend in India. One of the major reasons is the increase in crude oil prices. Due to increase in crude oil prices, the transportation cost has also increased which has led to an overall increase in the prices of goods and services. Another reason for inflation is the ever-increasing population of India. 

Article on Rising Prices in 150 Words

Rising prices are one of the most common economic problems people face today. The cost of living is constantly increasing, but wages remain stagnant. This means that people have less and less money to spend on essentials like food and shelter. Rising prices are a major cause of poverty and inequality. When the cost of living goes up, but incomes don’t, it hits the poorest people the hardest. This can lead to a spiral of debt and despair, as people are forced to cut back on basics like food and healthcare. There are several reasons why prices keep rising. One is simply that the demand for goods and services keeps increasing, while the supply remains static. This puts upward pressure on prices. Another reason is that businesses may be trying to increase their profits by charging more for their products or services. Governments can take steps to help reduce the impact of rising prices on people’s lives. 

Article on Rising Prices in 500 + Words

Introduction

Prices are on the rise, but why? This essay will explore the underlying causes of rising prices and offer some solutions to this problem. We are all Feeling It: The Impact of Rising Prices Rising prices is a topic that impacts us all. Whether we are buying gas for our car, groceries for our household, or clothes for our wardrobe, we can all feel the pinch when prices go up. But why do prices rise? Is it just greedy businesses trying to make more money? While business do play a role in setting prices, there are several underlying factors that contribute to rising prices. In this essay, we will explore some of these causes and offer some potential solutions to the problem of rising prices.

What are the causes of rising prices?

1. Increasing demand: As the world population continues to grow, the demand for goods and services increases, leading to higher prices.

2. Limited supply: When there is only a limited supply of a good or service, prices will rise to ration that scarce resource.

3. Inflation : Rising prices are often caused by inflation, which is when the money supply decreases in value, leading to more expensive goods and services.

4. Economic growth: When an economy is growing rapidly, businesses often raise prices to keep up with the increased demand for their products and services.

5. Exchange rates: A country’s currency can become valuable relative to other currencies, leading to higher or lower prices for goods and services purchased in that currency.

6. Energy costs: Rising energy costs can lead to higher prices for goods and services as businesses pass on these increased costs to consumers.

7. Transportation costs: Higher transportation costs can also lead to higher prices as businesses pass on these increased costs to consumers.

8. Raw materials costs: If the cost of raw materials increases, this will often be passed on to consumers in the form of higher prices.

9. Tax changes: Changes in tax rates can impact the price of goods and services, as businesses pass on the increased taxes to consumers in the form of higher prices.

10. Government subsidies: The withdrawal of government subsidies can lead to higher prices

The Effect of Rising Prices on People’s Lives

Rising prices have several effects on people’s lives.  

Here are 7 of the most significant:

1. Increased cost of living: When prices go up, the cost of living also rises. This puts pressure on families, particularly those on low or fixed incomes, as they struggle to make ends meet.

2. Inflation: Rising prices can lead to inflation, which in turn erodes the value of people’s savings and earnings. This can be a particular problem for retirees and other people on fixed incomes.

3. Reduced purchasing power: As prices increase, people’s purchasing power is reduced. This means that they can’t buy as much with their money, which can impact their standard of living.

4. Wages don’t keep up: In many cases, wages don’t rise at the same rate as prices. This means that people’s earnings don’t keep pace with the cost of living, putting them under financial pressure.

5. Job losses: When industries are hit by rising prices, it can lead to job losses as companies look to cut costs. This can have a devastating impact on people’s lives, leaving them unemployed and struggling to make ends meet .

6. Business closures: Rising costs can also force businesses to close down, leading to even more job losses and further economic hardship for those affected.

7. Social unrest: When people are struggling to make ends meet, it can lead to social unrest.  

The measures taken to control rising prices

1. The government has imposed a ceiling on the prices of essential commodities. 2. The government has also decided to release additional supplies of essential commodities to the market. 3. The government has also banned the hoarding of essential commodities. 4. The government has also fixed the wholesale and retail prices of essential commodities. 5. The government has also introduced a system of rationing for essential commodities. 6. The government has also taken steps to improve the supply situation of essential commodities. 7. The government has also taken measures to control the speculation in essential commodities. 8. The government has also taken measures to check the black marketing of essential commodities. 9. The government has also launched a campaign to create awareness among people about the need to conserve essential commodities. 10. The government has also taken steps to encourage production of essential commodities.

People Also Ask : 

1.What are the reasons of price rise? Ans : There are multiple reasons for the price rise. One reason is that the demand for certain products has increased. For example, the demand for smartphones has increased, which has led to a rise in the prices of smartphones. Another reason is that the costs of producing a product have gone up. For example, the cost of cotton has gone up, which has led to a rise in the prices of shirts.

2. What are the effects of rising prices? Ans : Rising prices have a number of effects on society as a whole. Firstly, they can cause people to lose out financially, as they are unable to afford the increased prices. Secondly, they can lead to people becoming less productive as they have to economize on their spending. Finally, they can lead to social tensions as people become angry about the increase in prices.

3. What is rise in price? Ans : Rise in price is an increase in the cost of goods and services. This may be due to factors such as inflation, a shortage of goods, or changes in taxation.

Related Posts

Facing down a surprising U.S. inflation surge

Kennedy School experts in public finance and economic policy weigh in on the causes and responses to the highest American consumer price jump in three decades.

Inflation in the United States has jumped to the highest level in 30 years, reaching 6.2% in October as measured by the Consumer Price Index. The COVID-19 pandemic has fueled consumer demand for goods and services at a time when supply lines are constrained and many industries have been affected by staff shortages. The inflation surge has generated intense political debate on the causes and the appropriate response.

We asked several economists and public finance experts at Harvard Kennedy School—all of whom have held senior federal government economics roles—to offer brief perspectives on how they view the underlying issues and the key policy choices facing the Biden administration and Congress. 

• Linda Bilmes - Inflation's impact at the state and local level
• Karen Dynan - Weighing the uncertainties
• Jeffrey Frankel - Inflation Do's and Don'ts
• Jason Furman - Supply and demand challenges
• Lawrence H. Summers - Biden team needs to signal its concern about inflation

Inflation risks also lie ahead for state and local governments

On the revenue side, income and sales tax receipts will largely keep pace with inflation, so moderate inflation is unlikely to have a major impact. However, if inflation leads to sharply higher interest rates that lead to a stock market sell-off, then states that are highly dependent on capital gains taxes (such as California and New Jersey) may suffer. Another area of vulnerability could be property taxes, especially states where increases in assessed values or in property taxes are capped, as with California’s Prop. 13. These prevent rising house prices feeding through into state revenues, and are also the major revenue source for local governments.

On the expense side, the biggest risk is rising wages, which consume the largest share of state budgets. We could see public sector unions pushing for a return of “CPI-plus” language in new labor agreements. This would automatically bake in the cost of higher inflation to local expenditures. In addition, high inflation could significantly weaken state pension plans, many of which assume that future wage increases will be only 2%.  Most of the current generation of local pension managers have little experience with inflation. They need to begin adjusting their portfolios now to prevent erosion of their asset bases.

Linda Bilmes is the Daniel Patrick Moynihan Lecturer in Public Policy and previously served as Assistant Secretary of Commerce.

What's certain is just how many uncertainties lie ahead

What is not clear is how quickly these issues will resolve. The size and persistence of demand/supply imbalances has repeatedly surprised us, in part because virus caseloads have stayed unexpectedly high. We have only a limited understanding of why so many would-be workers are staying out of the labor force, making it hard to predict how many will return and how quickly. We are not sure how much inflation expectations have risen (a critical determinant of whether higher inflation sticks) because of measurement difficulties.

This uncertainty makes it difficult for monetary policymakers to know when they need to begin raising rates to avoid letting inflation stay at undesirably high levels. Given that they may need to revise their views quickly based on incoming data, it is especially important that they communicate the high degree of uncertainty. Surprising financial markets with an abrupt unexpected change in policy could lead to a rapid decline in asset prices that causes a significant setback in the economic recovery.

Karen Dynan is a professor of the practice of economics and former chief economist of the U.S. Treasury.

Some inflation-fighting do's and don'ts

Let’s start with two don'ts.

• Don’t do what Federal Reserve Chair Arthur Burns and President Richard Nixon did in 1971, in order to help the president’s reelection: They responded to moderate 5% to 6 % inflation with a combination of rapid monetary stimulus and doomed wage-price controls. The lid was blown off the boiling pot a few years later; the inflation rate jumped above 12%.
• Don’t do what Donald Trump did on April 2, 2020 , to help out American oil producers: He persuaded Saudi Arabia that OPEC must cut oil output and raise prices.
• Continue to fight in the Senate for a fully funded social spending bill (“Build Back Better”).
• Let imports into the country more easily.  They are a safety valve for an overheated economy.  Trump put up a lot of import tariffs , which raise prices to consumers—sometimes directly, as with washing machines, and sometimes indirectly, as with steel and aluminum, which are important inputs into autos and countless other goods. With or without foreign reciprocation, U.S. trade liberalization could bring prices down quickly in many supply-constrained sectors. 
• Similarly, facilitating orderly immigration would help alleviate the shortage of workers that employers in some sectors are experiencing.
• Further vaccination would increase the supply of labor, through several possible channels.  One channel would be to keep children in school, allowing more parents to go back to work. Another channel is to alleviate worker’s fears of infection in the workplace. 

Jeffrey Frankel is the James W. Harpel Professor of Capital Formation and Growth and was a member of the Council of Economic Advisors from 1983-1984 and 1996-1999.   

Supply and demand—and the Federal Reserve’s key role

Economists like to explain everything with demand and supply, and the concepts work well here. Demand is likely to remain high, fueled by households with healthy balance sheets, continued fiscal support, and very low interest rates. No one knows how long it will take supply to recover, or even whether it will fully recover, but it could be at least a year. The combination of strong demand and weak supply will likely keep inflation uncomfortably high.

President Biden can do a little about inflation by helping with port capacity and other supply-chain measures. Even better would be dropping President Trump’s tariffs on China. But these steps would only be small. The main agency charged with controlling inflation is the Federal Reserve. They are right to continue to be focused on the millions of people without jobs but should recalibrate towards incorporating more concern for inflation into their policy stance, including setting a default of more rate increases in 2022, something it can call off if inflation and/or employment is well below what we are currently expecting.

Jason Furman is the Aetna Professor of the Practice of Economic Policy and previously was chair of the Council of Economic Advisors under President Obama.

Biden team needs to signal its determination to address inflation

 Simultaneously, the Administration should signal that a concern about inflation will inform its policies generally. Measures already taken to reduce port bottlenecks may have limited effect but are a clear positive step. Buying inexpensively should take priority over buying American. Tariff reduction is the most important supply-side policy the administration could undertake to combat inflation. Raising fossil fuel supplies, such as the recent deployment of the Strategic Petroleum Reserve, is crucial. And financial regulators need to step up and be attentive to the pockets of speculative excess that are increasingly evident in financial markets.

 Excessive inflation and a sense that it was not being controlled helped elect Richard Nixon and Ronald Reagan, and risks bringing Donald Trump back to power. While an overheating economy is a relatively good problem to have compared to a pandemic or a financial crisis, it will metastasize and threaten prosperity and public trust unless clearly acknowledged and addressed.

Lawrence H. Summers is Charles W. Eliot University Professor , Weil Director of the Mossavar-Rahmani Center for Business and Government,  and president emeritus of Harvard University. His government positions included Secretary of the Treasury in the Clinton Administration and Director of the National Economic Council under President Obama. Portions of this essay were excerpted from a Washington Post column .

Banner image by AP Photo/Noah Berger; inline image by Xinhua via Getty Images; faculty portraits by Martha Stewart

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Essay on inflation/Rising prices in Pakistan with quotations

Rising prices / inflation essay 300 - 400 words.

Inflation essay for 2nd year, class 12 PDF download

Inflation is taxation without legislation - Milton Friedman

Inflation is the crabgrass in your savings - Robert Orben

Inflation is the parent of unemployment and the unseen robber of those who have saved - Margret Thatcher

Production is the only answer to inflation - Anonymous

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Recent projections, delegate tracker, maryland, west virginia and nebraska primaries 2024: alsobrooks beats trone, gop incumbents survive, wholesale price increases accelerated in april as inflation remains sticky.

U.S. wholesale prices rose sharply last month, a sign that stubbornly high inflation may persist after three elevated readings in consumer prices to start the year

WASHINGTON -- U.S. wholesale prices rose sharply last month, a sign that inflation pressures remain stubbornly high after three elevated readings in consumer prices to start the year.

The Labor Department said Tuesday that its producer price index — which tracks price changes before they reach consumers — climbed 0.5% from March to April, after it dipped 0.1% the previous month. Measured year over year, producer prices rose by 2.2% in April, up from 1.8% in March and the biggest increase in a year.

A measure of underlying inflation, which excludes the volatile food and energy categories, also jumped 0.5% from March to April, and rose 2.4% compared with a year earlier. Economists closely watch core prices because they provide a better signal of where inflation is headed than the overall figure.

Tuesday's unexpectedly high readings may raise concerns on Wall Street, at the Biden White House and for inflation-fighters at the Federal Reserve. Last week Fed officials underscored that they were prepared to leave their key interest rate at 5.3%, the highest in 23 years, as long as needed to bring inflation back to its 2% target. Consumer price inflation has fallen steadily since late 2022 but stalled at an elevated level in the first three months of this year.

At the same time, some wholesale prices fell in ways that suggest consumer inflation could cool a bit this month. A measure of air fares fell 3.8%, and food prices dropped 0.7%. Vegetable costs plunged 18.7%, just between March and April. Hospital prices also declined.

That data, as well as some other figures, feed into the Federal Reserve's preferred measure of consumer prices, which will be released toward the end of this month. Economists estimate that figure may come in a bit lower than the previous month because of declines in items like air fares.

“In that respect, April’s news was mixed but, on balance, encouraging,” Paul Ashworth, an economist at Capital Economics, wrote in a research note.

On Wednesday, the government will release the latest consumer inflation data, which will command much greater attention from investors and economists. Analysts forecast it will slip slightly, to an annual rate of 3.4%, from 3.5% in March, after rising for two months. Core inflation is forecast to fall to 3.6% from 3.8%.

Last month, wholesale prices were pushed higher by more expensive gas, electricity, and freight shipping. A quirky measure of the cost of managing stock portfolios for investors also rose sharply, elevating the overall index.

As recently as March, Fed officials had forecast they would reduce their key rate three times this year. But in their most recent comments, most suggest they could cut once or twice this year, or maybe not at all.

Markets that had been positive for most of the morning flipped after the report was released and headed lower.

Persistent inflation has discouraged consumers, whose confidence has fallen in recent months, and threatens President Joe Biden ’s reelection bid.

The producer price index can provide an early read on where consumer inflation is headed. It is also closely watched because some of its data is used to compile the Fed’s preferred inflation gauge, known as the personal consumption expenditures price index.

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Oprah Winfrey: a Force for Good in Media and Beyond

This essay about Oprah Winfrey examines her multifaceted impact on the media, literature, and philanthropy. It outlines her beginnings with the influential “The Oprah Winfrey Show,” which redefined daytime television by addressing complex societal issues with empathy. The essay also highlights Oprah’s role in the literary world through her book club, which significantly influenced American reading habits by turning selected books into bestsellers. Furthermore, it discusses her contributions to entertainment through her production company, Harpo Productions, and her extensive philanthropic work, particularly the Oprah Winfrey Leadership Academy for Girls in South Africa. Oprah’s personal struggles and triumphs are woven throughout, illustrating how her experiences have fueled her efforts to empower others and effect social change. The essay portrays Oprah as not just a media mogul, but as a committed activist and a beacon of resilience and generosity.

How it works

Oprah Winfrey’s global fame stems not just from her innovative talk show but also from her sincere impact on literature, the media, and charitable giving. Her story of rising from modest beginnings to become a global superstar captures her heart and tenacity and resonates with millions of people around the world.

Starting with television, Oprah’s legacy began with the transformative “The Oprah Winfrey Show,” which redefined what a talk show could be. Launched in 1986, it remained a dominant force in daytime TV for over two decades, tackling issues others shied away from.

Oprah didn’t just host a show; she created a space for deep, meaningful conversations about life’s critical issues—from personal struggles to broader societal problems—making her audience feel seen and heard.

Oprah’s magic touch extended into the world of books with Oprah’s Book Club. Her book picks often turned into bestsellers, thanks to her knack for choosing compelling stories that sparked conversations nationwide. This “Oprah Effect” elevated authors from obscurity and reinvigorated the American reading culture.

In entertainment, Oprah continued to leave her mark through Harpo Productions, her own company that produced content often centered around important narratives that need more attention. Her projects, including the movie “Selma” and the series “Greenleaf,” highlight her commitment to storytelling that educates and inspires.

Philanthropy is another arena where Oprah shines. Through her personal charities, the Oprah Winfrey Foundation and the Oprah Winfrey Operating Foundation, she has poured millions into programs that empower women, children, and communities. The Oprah Winfrey Leadership Academy for Girls in South Africa stands out as a beacon of her dedication to education and leadership for those who need it most, providing young girls with the tools to change their destinies and the world.

Oprah’s personal story of overcoming adversity—battling through poverty, abuse, and systemic racism—has not only shaped her but also taught her the power of resilience and speaking out. Her openness about her challenges connects her with others in a profound way, making her achievements even more impactful.

Oprah’s approach to life and business teaches us the power of taking action and leading with empathy. Her work across different platforms—whether on screen, through the pages of a book, or in the field of philanthropy—shows that one individual can make a difference. Her ongoing efforts to advocate for justice and equality continue to inspire and push for societal progress.

Looking at Oprah Winfrey’s life and career, we see more than just an entertainment mogul; we see a compassionate, determined individual dedicated to lifting others up. Her influence stretches beyond the flashy glamour of Hollywood, reaching into the lives of those who need it most. As Oprah continues to forge her path, she stands as a living testament to the impact of hard work, kindness, and a relentless commitment to bettering the world.

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PapersOwl.com. (2024). Oprah Winfrey: A Force for Good in Media and Beyond . [Online]. Available at: https://papersowl.com/examples/oprah-winfrey-a-force-for-good-in-media-and-beyond/ [Accessed: 15-May-2024]

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College Costs Are on the Rise Expository Essay

The cost of college has been considerably rising over the last few decades. This development has made it harder for students to complete their college education smoothly. How these rising costs affect Americans is a constantly debated subject. The media, politicians, and other stakeholders have made this subject a major debate topic.

For example, when President Obama was campaigning, he made this issue a major campaign item. Statistics indicate that the rate through which college costs are rising is three times more than that of inflation.

This means that many students have to struggle to finish their college education and even when they do, they have to deal with several unpaid loans. This rise in college fees affects students in many ways. This essay seeks to investigate some of these effects.

The rise in college costs is hindering most students from pursuing higher level degrees. Instead, many students are opting for the more cost effective two year colleges. Statistics indicate that there has been increased enrollment in two year colleges over the last few years.

This is because entry to middle and higher level colleges is proving to be an uphill task for most students. Others are only seeking to join the higher level colleges after their two year colleges have provided them with a job.

Another result of rising college costs is that when most students leave college it is harder for them to buy homes. This is because by the time most students leave college; they have already accumulated huge amounts of money in debt. This in turn makes it harder for them to start saving money for a house when they get employed.

A survey conducted sometimes back indicated that only fifty seven percent of people between the ages of twenty five and forty four own houses (Choy 23). Two decades ago this number used to be higher. This shows a probable connection between rising college costs and a decrease in house ownership.

Students are getting into careers without necessarily having to train for them. Previously when someone wanted to start a business, he/she first joined business school in order to get the necessary training. Nowadays when young people want to get into a career, they are either just diving in or seeking alternative training.

For instance, there are people who seek attachment to mechanic shops and they end up with the same skills a trained motor engineer has. This is mostly because of the prohibitive fees that come with college training.

Socially, young people are delaying to start families as a result of the high college costs. The debts that come with a college education take time to offset. This means that other social engagements that require money like marriages and weddings are being delayed until one is financially stable.

Around sixty five percent of college students leave college with debts (College Board 4). Out of these, twenty five percent have debts exceeding twenty five thousand dollars. When these facts are put together, it means that some college graduates may be forced to forego weddings or even starting families.

High college costs do not have only negative effects. One positive thing about them is that they are adding value to college education. Major colleges in the country are receiving a record number of applications every year. This is because college education is changing some students’ lives.

The high costs of college education ensure that the quality and integrity of college education is maintained. If college education was cheap, it would be easy to obtain. This would then translate into its depreciation. In addition, because of the high value of this education, it is easier for college graduates to negotiate for better remuneration.

Many college graduates are pressured by circumstances to obtain jobs fast. This is because most of the times they have debts to start paying. When they lack the luxury of waiting for a good job, it means that they take up whatever job they can get.

This situation translates into many college graduates working in careers that are outside of their training. Sometimes due to frustration, college graduates end up taking careers that do not require a college degree. This decision is usually a painful one for most college students.

The rate of college completion is falling. Many students are not able to complete college due to these high costs. A study conducted to investigate this issue indicated that only about a quarter of those students attending college on a part time basis end up graduating.

This group is mostly consisted of those people who are working and studying at the same time. Moreover, higher college costs are making it harder for students from low income families to complete college (Ruppert 46). In fact, most people are of the opinion that college education is an affair of the middle and upper classes.

In conclusion, high college prices affect students and the youth in various ways. Although rising college fees seem to be a natural progression, stakeholders should act to balance its effects. This is because higher college prices seem to have more negative effects than positive ones.

Works Cited

Choy, S. P. Access & persistence: Findings from 10 years of longitudinal research on students, Washington, DC: American Council on Education, 2002. Print.

College Board. Trends in Student Aid, Washington, DC: Author, 1998. Print.

Ruppert, Samuel. Closing the College Participation Gap: A National Summary , Denver, CO: Education Commission of the States, 2003. Print.

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IvyPanda. (2022, April 21). College Costs Are on the Rise. https://ivypanda.com/essays/rising-college-costs/

"College Costs Are on the Rise." IvyPanda , 21 Apr. 2022, ivypanda.com/essays/rising-college-costs/.

IvyPanda . (2022) 'College Costs Are on the Rise'. 21 April.

IvyPanda . 2022. "College Costs Are on the Rise." April 21, 2022. https://ivypanda.com/essays/rising-college-costs/.

1. IvyPanda . "College Costs Are on the Rise." April 21, 2022. https://ivypanda.com/essays/rising-college-costs/.

Bibliography

IvyPanda . "College Costs Are on the Rise." April 21, 2022. https://ivypanda.com/essays/rising-college-costs/.

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