E How Far Can Inflation Go?

The pandemic had a fatal impact on the people from every corner of the world. The cost of living has been rapidly rising over the last few months and as thousands of people are left without jobs, the situation is even worse as many people from various countries are still struggling. Although the media often reports that the economic crisis is in the process of ending and recovery has already started, the reality is a little bit more different. The same applies to inflation rates. Recent statistics show that inflation is the law, but for everybody who truly understands the concept of inflation, it’s obvious that nothing has changed for good and probably inflation today is higher than the numbers say. 

It’s hard to believe that prices have risen by only 1% over the past year which is what central banks have been telling their customers because the Coronavirus pandemic has made living more expensive than ever. The problem with these numbers may be the fact that they calculate numbers of real output, real wages, and poverty using inflation adjustments without including the higher cost of living during the pandemic. This means that the ever-rising level of inflation hasn’t stopped at all and the world still faces economic challenges as a result. 

Can the inflation rate be controlled?

So, we can say that global inflation continues and it’s something we more or less take for granted these days, and nobody knows for sure how far it will go. Despite the reduced numbers, the governments in many countries are trying hard to reduce the rates. Usually, inflation occurs when the economy grows as a result of too much spending. It is accompanied by the rise in prices and the devaluation of the national currencies as the economy is worth less than it was before. 

There are several ways the government uses to control inflation which more or less works. For example, in the past few months, the Federal Reserve (Fed) and the federal government (feds) introduced several initiatives in the US to reduce the financial crisis but not all the measures they usually take are effective and some of them can cause damaging effects. They often try to reduce inflation through wage and price controls which can cause a recession and a high rate of unemployment. 

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