Learn in this Post (accompanied with Video Guides) how Inflation is Reaching Record breaking highs Globally, What is Causing it and What can be Done to Control it?
In early 2021, a worldwide increase in inflation began to occur. It has been attributed to various causes, including pandemic-related fiscal and monetary stimulus, supply shortages (including chip shortages and energy shortages), price gouging and as of 2022, the Russian invasion of Ukraine.
Debate arose over whether inflationary pressures were transitory or persistent; however, central banks started to raise policy rates in 2022. Many countries have seen their highest inflation in decades and their central banks have responded by aggressively increasing interest rates.
Learning Video 1 on the Drivers of Price Rise
One theory, voiced by Stanford economist John B. Taylor and Johns Hopkins economists Steve Hanke and Nicholas Hanlon, is that the uptick in inflation in the US was due to the large increase in the money supply, when M2 grew at a monthly rate of between 22% and 31% in the early months of the pandemic in 2020. Many governments adopted similar stimulatory actions around the world to support the wellbeing of their populations early in the COVID-19 pandemic.
Learning Video 2 on the Drivers of Price Rise
Conclusion & Summary of Videos
5 Top Reasons that are the biggest Drivers of Current Inflation are listed below :
- Global Supply Chain Blockages around the World that are stalling the goods movement leading to Price Rise.
- Rising Consumer Demand with Inadequate Supply of Everyday Needs.
- Some have Attributed Large Supply of Money (Monetary Stimulus) also to Higher Inflation.
- High Fuel Costs also has contributed significantly to Price Rise.Russia Ukraine War that has led to Energy Crisis and high Gas Prices in EU specifically and all the nations that are dependent upon Russia for Gas Supplies.
- In Many Markets, Pandemic led to an increased Demand for Real Estate quickly (due to an Increased Demand for work for home), and that led Sellers to Increase Real Estate Prices Significantly.