Inflation is a complicated thing with the ability to both help and hurt. It can be an effective tool to help jump start the economy, but it can also be a detriment that hurts the economy so badly that it causes entire economies to fall. Here in this crash course, Inflation will be explained in most of its aspects, as well as what the lasting effects of inflation are on the present, the past, and the future. 

Now, what is Inflation? Inflation, put simply, is when prices rise for goods and services. As an example, let’s say a piece of pie cost 50 cents in 1970. This piece of pie stays the same throughout the years and now in 2020 the slice of pie costs $3. That is inflation in a nutshell. There are a few kinds of inflation, that being demand-pull inflation, cost-push inflation, and built-in inflation. Demand-pull inflation is when there are not enough products and demand continues to rise, so prices rise. So, going back to the pie example, it’s like there’s not enough pies so the price of the individual pie slice increases. Cost-push inflation is when it costs more to make products, so businesses have to raise the prices to continue production. It’s like the pie slice ingredients, say apples and flour for example, are going up in price, meaning that the pie has to have an increased price as well. The final type is built-in inflation, where workers get paid more to afford products so the products go up in price. It’s like the bakers want more money so the pie will have to cost more for everyone else to even things out.

So, if all the given examples had a negative connotation, how is there any positive side to inflation? Well, inflation isn’t a solely problematic thing with additional good attributes; which can be noticed in how a very slight inflation rate shows economic growth and people spending money. Inflation is also good in the sense that it isn’t deflation . Deflation is the exact opposite of inflation, where the price of products go down, so people will spend less money in anticipation of even lower prices, a process which can slow an economy to a halt. 

There are many examples of inflation harming societies, so let’s name a few here. Back in 2008, Zimbabwe, a country in the southern half of Africa, was hit with hyperinflation back in 2008. Prices basically doubled each day (with a 79,600,000,000% inflation rate, 98% each day)) and that messed with the country so badly that they had to get rid of their own currency to stay afloat. That is an example of hyperinflation, a type of inflation that presents a huge risk to any country in or out of a financial crisis. The next example here is Cuba, where the inflation rate was over 75% as of December2021, falling again the next month. Cuba was in deep trouble with the lack of revenue usually brought by tourists due to the pandemic , and they changed their currency to be the currency tourists use on the island. All of this coupled with supply chain issues caused the country to have protests as well as other problems. Another, present example that is less extreme is the US, where the pandemic and other large events have made it so that prices have soared. What might these products be, though?

America, the land of the free and skyrocketing gas prices. Prices have been rising for a multitude of reasons, one of the big ones is the current war between Russia and Ukraine. Russia was the fourth largest gas producer and the second largest natural gas producer, a supply boycotted by many when they invaded the country. This pushed up the prices of gas and that had an additional domino effect on other products like groceries. Another big reason for this inflation is the fact that there is a wage increase for those managing to hold a job in the pandemic and a drop in employment due to the outbreak of the COVID-19. This scenario is literally built-in inflation to a head, but it is extremely rushed so it is quite easily noticeable. The last big reason for this is that inflation has always existed and will forever continue to exist. It’s not as flashy as other topics but it is still very noticeable. Take the example of gas prices. April of ‘93 seems to be an entirely different time now, and the gas prices at the time are no exception, where the price of a gallon was only $1.07! That is a harsh contrast from the prices in April of 2022, the average gas price being $4.21. That is almost a 400% increase! (Note that the price of gas before the Russia-Ukraine war was $3.61, though there has been a solid 80 cent increase so that it is more accurate as a number when talking about gradual inflation, stupid chart not giving me February of ‘93!)  

So with this talk of the US as a whole, how is inflation affecting our lovely state of Maryland, famed home to Blue Crabs? Well, inflation has caused a rise in prices that differ in multiple ways from those of last year, that being an 8.3% price increase from last year April to now, with slight increases from the last several months. Now, this 8.3 number isn’t equal for all things, as, for example, food prices have risen 10.8% since last year as a whole and there has been a 20.7% increase for all kinds of meat. The price of gas has also risen, with the average gallon of gas in Maryland being $4.59, one penny short of the national average at $4.60 per gallon.

So with all this information and the overwhelming doom and gloom around us, what can people do about it? Well, the truth is nothing on the big scale. Supply issues and pandemics are not fully in your control, and with those being some of the big issues leading to this, the only things you can do are for yourself and the people in your family. One of the big things is to look for sales and buy store brands. Sure, it may not be what you had normally or it may not be the “name brand,” but it will still be of similar quality and save you money in these trying times. Another thing you can do, and this is dependent on multiple things, is to not use the car to go places. It saves you gas, money, and allows for exercise. You could also buy an electric car, though I wouldn’t recommend it if you don’t have the necessary funds. One last thing you can do to help save money is to stay safe, for hospital bills are expensive and are not needed in your life. 

Further Research:

https://www.investopedia.com/terms/i/inflation.asp

https://www.imf.org/external/pubs/ft/fandd/basics/30-inflation.htm

https://boycewire.com/effects-of-inflation/