Inflationary expectations - emergence at inflation of self-sustaining character. The population and economic subjects get used to continuous increase of price level. The population demands pay rise and stocks up with goods for the future expecting them a fast rise in price. Producers are afraid of price increase from the suppliers, at the same time putting in the price of the goods the increase in prices for accessories predicted by them and shake thereby an inflation flywheel. We can observe a living example of such inflationary expectations in the everyday life.
However the treatment of inflation as overflow of channels of monetary circulation by the depreciating paper money cannot be considered full. Inflation though it is shown only in growth of the commodity prices is not especially monetary phenomenon. Inflation is the thin social and economic phenomenon generated by reproduction disproportions in various spheres of a market economy. At the same time, inflation - one of the most burning issues of modern development of economy practically worldwide.
The imported inflation which role increases with growth of openness of economy and its involvement in world economic communications of this or that country. Opportunities for fight at the state it is happy are limited. The method of revaluation of own currency sometimes applied in such cases does import more favorable, at the same time complicating export.
All these types of inflation exist only at its open state - i.e. at rather free market. At the suppressed inflation the increase in prices for goods and services maybe is not observed, and depreciation of money can be expressed in deficiency of the offer.
Labor productivity increase with other things being equal leads to reduction of prices. However chances when increase of labor productivity leads to salary increase. In this case - so-called inflations of costs salary increase in some branch really is followed by increase of an overall price level.
The most laconic definition of inflation - increase of an overall price level, the most general - overflow of channels of the address of money supply over requirements of commodity turnover that causes depreciation of monetary unit and respectively growth of the commodity prices.
actions for restriction of solvent demand as stimulation of economic growth and artificial maintenance of employment by decrease in natural unemployment rate conducts to loss of control over inflation.
Modern inflation represents the difficult versatile process which to some extent captured all countries. High rates of inflation cause serious damage to economic development of the country, to its population. Ideal option of healthy economy - lack of inflation though, as well as any ideal, it is hard-hitting.