As I know you are aware we are in a period of increasing inflation. Now most people here inflation and think prices rise all over and pay, not as much nor as quickly. In most instances this is correct, most employers on increase pay once a year, or never in some cases I am aware of…
But according to a chart I located; there are advantages and disadvantages of inflation I have a few listed below:
Advantages:
- Moderate inflation enables economic growth
- Moderate inflation allows adjustments in real wages
- Moderate inflation allows adjustments in prices
- Inflation is better than deflation, which causes recessions
Disadvantages:
- Creates uncertainty and lower investment
- High inflation often leads to lower growth and less stability
- Reduces international competitiveness
- To reduce inflation may lead to a recession
- Fall in value of savings
- If wages don’t keep up – lower real wages
The advantages are only for moderate inflation and the disadvantages see to greatly outweigh the benefits.
Hope the Democrats are up to the task before them…