Inflation – Brief case study

Extract

[...] The effects of corrosion currency is not limited to the order financeira.Vão addition. How ponders E. Giannetti da Fonceca "stable currency is a civilized coexistence rule. It is the essential part of the system of weights and measures that accurately and transfer to economic relations." Measuring systems of the time, the distances, volumes, speeds and so many other aspects of objective reality are achievements of civilized life. And measuring the value of things, for a stable unit, is so important - or more so - as all agreed systems. [...]

[...] Inflation is a monetary phenomenon nature and its effects beyond the usual boundaries of the economy. The hyperinflation typically occur because of a series of combination of causes and usually do not last long, because its effects are not indefinitely bearable. They destroy the currency and cause a transactional collapse and may even cause political and institutional rupture. Brazil is a country that lives "historically" with inflation. In this "economic means" beyond inflation also found two major problems: the problem of unemployment and the problem of growth. [...]

[...] For your exposure, consider the following: The interaction of real and monetary sectors: how variation in the actual levels of liquidity affect prices interest rates, the performance of the real sector of the economy and, by extension, other aspects of society. The concepts related to the variation of the value of money: inflation as the predominant category. The concept of inflation. The causes of the inflation that originate in the financial sector and those that originate in the real sector. The economic consequences and the extra-economic inflation: a comprehensive review. Inflation in Brazil. [...]

[...] The disinflation process are firm and durable. The Deflation. It is the general fall in prices below those which were being currently praticados.O retreat implies fall in price indexes for positions below the stability line valuing the currency in relation to other ativos.A deflation is generally associated with stagnation econômica.A stagnation flows into depression. So it was with the great depression of the early 30's, when in the United States, the GNP had a major setback. Reflation. It is around the stability of the economy as a whole, after periods deflacionários.Os prices return to the line of stability, the losses recorded recovering and re-establishing the structure on the value of goods and services. [...]

[...] I - THE CHANGE CURRENCY VALUE: CAUSES AND CONSEQUENCES There are more subtle or safer to destroy the basis of society than to corrupt its currency. This process mobilizes to destruction, all the hidden forces of the laws econômicas.As currency value variations were, for all that involved, among the most significant events of economic history of the modern world. Inflation and deflation inflicted heavy damage. Delayed the production of wealth and changed its distribution between social classes. Deflation has been more damaging to slow production. But inflation has been the worst of the two in their effects on the distribution of wealth. [...]