Post
Topic
Board Economics
Re: Inflation overpowers the value of money
by
Sayeds56
on 04/08/2023, 08:33:29 UTC
You left out a very important one: high energy prices, which affect everything. If gasoline and electricity prices go up, you not only pay more to fill up the tank and for the electricity in your house, you will also pay more for groceries, for example.
In fact, the inflation we have been experiencing for a couple of years now is mainly due to energy prices and massive post-covid printing. Then it was exacerbated by the Ukrainian war, but it started earlier.

Energy prices indeed play vital role in fluctuation of inflation rate, and it is an important component of consumer price index (CPI). We have witnessed how sharp the prices of energy surged aftermath of Russia Ukraine war due to supply chain disruptions, which subsequently caused rapid increase in inflation. This situation serves as a good example that how fluctuations in energy prices can trigger sharp increase in inflation within short timeframe.