There is a need to realize whether inflation is a myth i.e. the saga of historical events like war-inflation, cost-push and demand-pull inflation, monetary-inflation, tax-induced inflation, etc or a miracle i.e. the manipulation being played by policy makers, policy-dictators and market big-bulls. Inflation has become a common feature of modern economy, whether developed or under-developed, rich or poor, capitalist or socialist (or communist), during post world war-II period; it doesn’t mean there was no inflation before it. In this research paper, my focus is on findings of the common fact behind the problem of inflation. Besides, I intend to make my research have more societal relevance.
The causes you mentioned are critically important determinants of inflation. However, expectations and consumer behavior play undeniable roles as well.
Agree with the all the points by you as well as Sahand ebrahimi poorfaez. But I also believe that in most cases, inflations and its causes are mediated by the governments themselves intentionally in order to achieve some mysterious and mischievous goals. In some specific cases, it may be an outcome of the policy failures. As per my understanding on the issues as we have been witnessing in India for last two decades, the failure to control inflation is probably deliberate.
Yes Siba, it is what we exactly want to reveal the facts behind inflation.
Dr. Arjun, this is an interesting project..., did you finish with this project? We have experienced to decompose the regional inflation rate (Central Java province, Indonesia). We employed the trimmed percentile statistics method. We found : (1) non-core inflation was more dominant than core inflation. It was revealed that monetary policy become ineffective to control the regional inflation rate. Maybe this is another explanation about the government policy failure mentioned by Siba; (2) the administered price commodities were dominated contribution to the regional inflation rate such as gasoline and his derivation commodities, rice (staple food) and other volatile food commodities. This is also reflect the government policy failure.
I do agree with you Bayu. W. Yes, I have completed this project/research paper and it will be shared on ResearchGate.
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