What is the hindrance of inflation on economic recovery

It causes a large increase in the occupation of funds, thereby increasing the capital demand of enterprises. It causes the profits of enterprises to increase inflated, resulting in the loss of enterprise funds due to profit distribution. Cause profits to rise and increase the cost of equity funds of enterprises.

Cause a decline in the price of **** and increase the difficulty of financing enterprises. It causes a shortage of funds and increases the financing difficulties of enterprises.

People are very afraid of inflation, and they are as disgusted with prices as they are. Many people know the word inflation, but they don't know that there is also the word deflation. Although deflation is not famous, deflation is not easy to bully, and it will cause great harm to economic life as long as it moves lightly.

Deflation is not a decrease in the price of one or two goods, but the overall level of prices is **, or even continuous**. Some people will say, is the price ** not good? Could it be that it is good for prices to rise on the front basis?

Prices and prices are not good, and it is best to maintain prices in a state of balance. Prices**, things are generally not easy to sell.

In actual sales, many merchants use price reductions to attract consumers to shop. The price is the first as a whole, and the profit margins of merchants will shrink sharply. And the cost of wages, raw materials and other expenses is not said to be reduced, not a day's work.

Costs will shrink the merchant's profits again. In the long run, how big a business is not able to withstand the toss, there are two roads in front of the business, one is to reduce production and reduce staff, and the other is to close.

Most businesses will adopt the method of reducing production and reducing employees, which will lead to an increase in the number of unemployed people. Losing the ability to create wealth, people will clutch their purse strings, and they will not dare to spend money, and businesses will not dare to invest in expanding their stores. Product sales will become more and more difficult, and when product sales are difficult, prices will be lowered again, and then layoffs, and the cycle will continue.

At the end of the 20th century, the Asian financial crisis broke out, the world economy struggled in the shadow of recession, and China's economy was also deeply affected by deflation. Of course, China will not sit idly by, a large number of policies have been introduced, and a prudent monetary policy has come into being, and the time for the performance has come.

From October 1997 to February 2002, the People's Bank of China lowered interest rates six times in a row, greatly reducing the loan burden of merchants. In 1998, China issued hundreds of billions of yuan of long-term construction bonds, built a large number of major basic projects, and stripped commercial banks of their non-performing assets. After the introduction of various policies, the economy has entered a new round of growth.

There are two types of inflation: benign and vicious.

Benign moderate inflation is accompanied by the economic development of Changyu. Resistant to tung rolling.

Hyperinflation, also known as an economic bubble, is the precursor to a recession.

Money production sliding towards a privileged order].

Today's free economy is riddled with a fiat, non-cashable monetary system in which central banks monopolize money production. Before questioning the negative impact of the market economy on morality, we need to examine the extent to which the free market has borne the monopoly of money production.

First, the central bank's monopoly on money production is a product of the infringement of private property rights. The encroachment of money production on the right to private property is achieved through the "expansion of the nominal quantity of money". Prior to the advent of banking, this expansion was mainly achieved by reducing the fineness of the coinage.

If color reduction is illegal, then this adulteration fraud is always on the edge, and traders can also drive away bad coins by checking the fineness. However, when ** monopolizes the coinage, subtraction is no longer regarded as adulteration fraud, because it is legal. Next, you will mark the coin that is actually only half an ounce with "one ounce" and put the other half an ounce in your pocket.

After the advent of the banking industry, most of the banks at first issued bank bills based on full reserves, and later banks gradually transitioned to banks that issued excess bank bills based on partial reserves. If overissuance is illegal, then this counterfeiting fraud is always on the edge, and the holder can also drive away the bad currency through a run. However, when a bank bill issued by a partially prepared bank is given the status of a legal monopoly currency, it is authorized to suspend the payment, that is, to eliminate the risk of a run by refusing to cash the bank bills agreed in the contract, and the bank notes are converted into non-cashable money, and the central bank becomes a monopoly money producer.

3] Second, inflation violates the three basic ethics mentioned above. Inflation can be defined as "the phenomenon of a nominal quantitative expansion of any medium of exchange in excess of its output in the free market". The minting of coinage and the over-issuance of bank bills are inflationary.

As mentioned earlier, in the free market, this underground inflation is marginalized and constantly eliminated. Inflation initiated by monopolizing money production is not easy to control. Inflation proponents have a saying:

Economic growth is only possible if it is accompanied by a corresponding monetary** growth. This statement conceals an economic common sense: as long as we continue to choose more efficient production methods, our costs will always show a downward trend.

Even if it is not as good as Moore's Law, the innovation effect will always allow our customers to enjoy products and services that are cheaper, or the same as higher quality products and services. It can be seen that the growth of money preserves industries with rising costs, i.e., industries that support the inefficiency of the mode of production (the ethical issue of responsibility) or support the continued exploitation of increasingly scarce natural resources (the ethical issue of plunder), and all this comes at the cost of continuous infringement of private property rights (ethical issues of freedom).

See. The Ethics of Money Production", revealing the truth about inflation, sorting out the ins and outs of money production, and torturing the current monetary system.

Inflation is only a part of the process of the economic cycle or the manifestation of the obstacle, and cannot be simply defined as "inevitable" or "recession". If it is "imported inflation", then it is not easy to talk about the source after reducing or replacing the import of Jane Liquid, it is not "inevitable", and there are more accidental factors. And inflation, if properly managed, does not necessarily lead to a recession.

Bonissia's answer is a generalization, specifically, slight inflation has a driving effect on the economy, because in the inflationary period, the price of goods is flexible, and the wages of workers are limited by the signed contract and lag, especially in the case of excessive labor supply, wages are seriously lagging behind prices, so the profit margins of manufacturers increase, prompting producers to expand production, drive employment, and promote economic growth.

In times of high inflation, consumers and producers are afraid of losing money in transactions due to inconsistent expectations of inflation, and producers are afraid of losing money in transactions. The sharp contradiction between supply and demand will eventually result in a social and economic chaos.

1 Mild inflation is good for the economy and can drive economic development like the case in China in previous years.

2 Moderate inflation is a kind of exploitation of people's wealth, and people will be unhappy, such as China now.

3 Hyperinflation caused the economic system to collapse completely, and the people embarked on the road of revolution, such as the people after the Anti-Japanese War, who were not so much killed by the Communist Party as by themselves.

1. The aggregate demand of the society is greater than the aggregate supply.

Manifestations. Generally speaking, inflation inevitably causes prices, but it cannot be said that all prices** are inflation. There are many factors that affect prices. Writer Sanbei said: Inflation writes the history, and the relationship between supply and demand depicts the band.

The amount of banknotes issued must be limited to the amount required in circulation, and if too much banknotes are issued, causing the banknotes to depreciate, the price will be **.

The value of the commodity is proportional to the value of the commodity, and the increase in the value of the commodity will be.

**Affected by supply and demand, when the supply of goods exceeds demand, **will**.

Policy adjustments, straightening out the relationship will cause.

Poor circulation of goods, poor market management, arbitrary fees and fines will also cause the first commodity to be fined. It can be seen that inflation is only possible if the price of goods** is caused by the issuance of too much banknotes.