Inflation

Main article: World Economy

Inflation in countries

• Inflation in Russia
• Inflation in Ukraine

• Inflation in China

• EU inflation
• Inflation in Spain
• Inflation in Germany
• Inflation in France

• UK inflation
• US inflation

Why inflation in advanced economies is historically always lower than in developing economies

This is directly related to the efficiency of the economy and the management system (business, regulatory bodies, fiscal and monetary authorities).

What is economic efficiency? Quickly and efficiently apply resources and technologies in the right direction. Demand arises - with minimal delays, the supply of goods and services is formed, which balances and balances the supply and demand curve, Spydell Finance wrote in December 2023.

The more developed the economy, the faster the speed of "inclusion" of the supply of goods and services, while the peculiarities of the capitalist system imply the greatest diversification of producers, especially in competitive segments.

The higher the diversification, the higher the stability and less dependence on weak chain links. Therefore, in countries with developed economies, if demand or demand potential arises somewhere, financial, production, scientific and technical resources are instantly consolidated, which allows you to quickly satisfy demand through an intensive increase in supply.

There are also failures in the system, like an episode of fiscal extremism and monetary rabies in 2020-2021, which created a critical imbalance of unsecured monetary supply in the United States, the EU and Britain.

The ability to estimate and predict potential demand is the key to a quick reaction, which means maximizing profits, since the highest margin is received by the first person who produced goods or services.

In the medium term, the introduction of AI is expected to have disinflationary effects, but at the same time, increasing inequality and the risks of rising unemployment and hitting vulnerable offline industries with low automation capacity.

2023: Global inflation storm

The topic of inflation in 2023 does not leave the agenda, and from 2021 this problem has affected almost all countries.

Surprisingly, the COVID-19 crisis came from China, but China managed to keep inflation under control (inflation growth of only 6% in four years), while developed countries beat from all trunks with fiscal and monetary incentives, which provoked several waves of inflationary pressure.

There is no point in comparing a particular period, because the phases and intensity of inflationary pressure in the leading countries of the world varied greatly, so a representative comparison will be from 2019 to 2023 inclusive (comparison of accumulated inflation for 4 years), because it was from 2019 that a series of amazing events began around the world.

Source: Spydell Finance, as of October 2023

Accumulated inflation over four years in the leading countries, plus or minus, is comparable due to general connectivity, integration, a similar structure of the economy, the financial system and a fairly coordinated fiscal and monetary policy.

For example, from 2019 to 2023, accumulated inflation in the United States is 19.1%, about the same in Germany - 19.7%, slightly higher in Britain - 21.5%, but better in Italy - 17.3% and in France - 14.8%, and in Spain and Canada price increases about 15%.

The lowest inflation in Japan is 5.5% (the country exists in its closed meta-universe with unique structural features) and in Switzerland - 4.9%.

Among developing countries Russia (accumulated inflation for 4 years - 32.1%) in the group of outsiders, because the situation with inflation is better at - India 26%, - 11.8%, Indonesia - Brazil 27.9%, - To Mexico 24.5%, - REPUBLIC OF SOUTH AFRICA 22.1%, - 12%, Saudi Arabia - 7.7%, Malaysia - 8.1%, Thailand - 29.1%, Bangladesh - 12.1% Vietnam and even in - 30.2%. Colombia

In Eastern Europe, very high inflation rates are observed in Hungary - 46.5%, Poland - 39.2%, the Czech Republic - 36.8% and Romania - 35.8%.

The record holders for inflation are predictably: Argentina - 705.6%, Iran - 310%, Turkey - 250%, Nigeria - 96.9%, Pakistan - 74.7% and Egypt - 48%.

2022

Inflation rate in 186 countries

Data for November 2022,

Global inflation forecast for 2022 as of October

Global inflation growth to 10.1%

Average inflation in the global economy as of October 14, 2022

2019: Bloomberg: How capitalism killed inflation

Persistently low inflation is difficult to explain with standard macroeconomic theory. Price pressures have been weak since the global financial crisis because the economy had a lot of unused capacity, including underutilized labor. What's surprising for November 2019 is that even after one of the longest economic upswings in U.S. history, the unemployment rate hovers around half-century lows, inflation still remains subdued.

The Fed has repeatedly failed to meet a target set in January 2012 - a two percent annual change in the personal consumer spending price index. Once you remove volatile food and energy prices, inflation has reached two per cent in just one month (July 2018) in the last seven years.

While Venezuelan-level five-figure inflation is devastating, it slightly greases the wheels of commerce. It's easier for companies to cut wages because simply keeping them is tantamount to cutting real wages. Some inflation is also good for central banks because it helps them fight a recession. To encourage borrowing, they can cut key rates to well below the inflation rate. But they have no room for that if the inflation rate is just above zero. The unexpected decline in inflation also penalizes borrowers, making their debts more burdensome.

So who or what is killing inflation? There is growing evidence that the killer is not the Fed, the ECB or the Bank of Japan, although central banks tend to believe in Milton Friedman's dictum that inflation is "always and everywhere a monetary phenomenon." The researchers find that low inflation is largely a consequence of globalization, automation or weakening of unions - or a combination of all three factors - that together undermine workers "ability to bargain for higher wages.

In other words, the capitalists killed inflation. After World War II, Polish economist Michal Kalecki portrayed inflation as a product of the struggles of business and labor. If workers manage to achieve significant wage increases, their employers recoup the costs by implementing price increases, forcing workers to demand even more, and so on, in a wage spiral. On the contrary, if workers have little or no leverage, as many industries do now, the wage spiral never starts.