Why can’t prices just stay the same?
If high inflation hurts just about everyone, why can’t we have no inflation?
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Over the past few years, most of the world has experienced some pretty intense inflation, with prices rising as much as 10 percent in a single year. In 2024, even though inflation rates have fallen to more manageable levels, prices are still way up and are very unlikely to come down. Which, understandably, continues to be a source of major stress for people all over the world. So why can’t prices just stay the same?
As a consumer, steady prices and zero inflation seems like the ideal: You want your purchasing power to stay the same and for your dollar today to buy you exactly the same amount as your dollar tomorrow. But even in times of global economic health and stability, governments and their central banks actively avoid letting inflation get too low. That’s because 0 percent inflation might actually end up doing more harm than good.
In this video, we take a look at the reasons why.
Sources and further reading:
To take a closer look at inflation and interest rates in the US, check out FRED (the Federal Reserve’s economic data repository): https://fred.stlouisfed.org/
You can read more about inflation targets here: https://www.imf.org/external/pubs/ft/fandd/basics/pdf/jahpan-inflation-targeting.pdf
And you can see more of Rakeen’s work here: https://groundworkcollaborative.org/person/rakeen-mabud/
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36 Comments
stop using government money
VOX are u married?
just joking LOL
Inflation is because governments want to spend money they don't have, so they print money, increasing the money supply. It's that simple.
These are sickeningly deceptive lies. This video is lying. Inflation and government policies do NOT work this way at all. BEWARE! These are Big Lies. Chihuahua!
Ok but I don't care about economic growth I want financial stability, give me 0% inflation or force companies to keep up with inflation
I don't think that deflation is that hard to combat. You just have to give money to the poor. They probably are starving to spend on goods and services, they don't have room for serving. Don't say that governments don't have money, wait until the next big company bankruptcy and see.
I've lost a significant amount of money in the last 6 months and it feels like the odds are stacked against me. Can't believe I've worked so hard to save and invest, only to see it all dwindle away
We Are in Unchartered Financial Waters! every day we encounter challenges that have become the new standard. Although we previously perceived it as a crisis, we now acknowledge it as the new normal and must adapt accordingly. Given the current economic difficulties that the country is experiencing in 2024, how can we enhance our earnings during this period of adjustment? I cannot let my $680,000 savings vanish after putting in so much effort to accumulate them.
So, right now we are in an inflationary period. Companies make more, companies fire more. The cycle is broken.
This all just sounds like excuses to charge more money for things
la wea tonta
DCU is great, I have a 1.49% interest rate on my car right now
People don't buy expensive items because later will be more expensive
Why did I get an ad for this video that was the first 15 seconds of this video
Well the salary doesn’t increase that much but the taxes and the inflation does 😂😂
Nah deflation doesn’t make that 😂 if the prices became regular and logical everyone expect the capitalists will be so happy, prices are the same, salaries are the same, life moves, like come on, I won’t change my mind if I want to buy a car or a house, I won’t do that if I need grocery, but I will when prices go high!
This whole theory goes right out the window when inflation drives prices up, people spend more, profits rise and then companies lay off people and still continue to raise prices anyway. There's not any virtuous cycle anymore, there isn't even a cycle. Money goes right into shareholders' pockets and stays there while the working class is left struggling and fending for ourselves. In developed countries you may be hard pressed to find out, but in the third world it's flagrant and it'll ripple out to the first ones as well. (Sorry if my grammar was bad)
The problem with this Video is, that it is in part completely made out of economical theories. The deflation spiral goes after the logic that people will not spend money if prices go down. I would challenge that logic badly and hold against it. That's kind of a theoretical paradigm that moves economics into a psychological frame and is completely speculative.
It's the same game economics played with minimum wages back in the day.
The behaviour of consumers is completely speculative and we never know about the true behavior if nobody wants to go out of the inflation cycle.
So this Video explains nothing but economics theories and the best thing, economists are arrogant enough to try and behave like they could predict a sociological question.
Uncommonly inflation lol vut it was everywhere
The short answer: Capitalism.
Is so wrong this video. Prices dont go up because of demand or costs, prices go up because money has less value because government prints new money. Deflation is not wrong, and in the the great depression USA had a big deflation because the FED made intervention years before and broke all the system. Inflation is a crime, that stole your money, they print so they can spend more and can destroy your wealth and your savings.
Price stay the same actually, in Japan
Can't we just aim for a small amount of deflation year by year and just had out stimulus checks or do other inflationary measures if it starts to hit the fan? Would love to see 0% inflation or 0.5% deflation year by year, especially after everything we just went through. Also, why was inflation so low in the so-called "era of easy money." Would be awesome if we could have near zero interest rates and zero percent inflation or minor deflation
That is annoying
because companies are avaricious
This literally didn't explain much and missed so amny other things.
perhaps we should all start by rejecting a neverending continuous growth economy. its ok to stay stagnant sometimes for things to stabilize and catch up instead of the constant chase and priority for unlimited growth. greedy capitalist economy
Fiat money
I don't think we spend enough time talking about the extraordinary profiteering on the part of some very large corporations the last few years. We also need more tools for the federal government to control prices, like a windfall profits tax.
You DID NOT explain the topic proposed in the thumbnail. Zero explanation of money volume vs demand, why government needs to print money etc etc. You just chose ONE of the reasons inflation is kept at a certain level, and disregarded the rest. Very poor coverage of the topic.
Awesome! Interesting and easy to understand! Love your content!
President Nixon tried freezing prices AND wages to stop inflation. (didn't work!)
Socialists should stop talking about economics
Thank goodness you brought this up!
Truly, investing has changed my perspective on how one can succeed in life; working multiple jobs isn't the optimal way to attain financial freedom and unfortunately, we discover this later in life.
Currently earn as much as 10 grand weekly and this has improved my financial life. Great piece!..
I believe the Inflation crisis will get even worse. Many struggle to save due to low wages, rising prices, and exorbitant rents. With homeownership becoming unattainable for middle-class Americans, they may not have a home to rely on for retirement either.