{"id":1009,"date":"2021-09-23T11:43:18","date_gmt":"2021-09-23T11:43:18","guid":{"rendered":"https:\/\/trusteconomics.eu\/?p=1009"},"modified":"2021-09-23T11:43:18","modified_gmt":"2021-09-23T11:43:18","slug":"inflation-is-dynamically-back","status":"publish","type":"post","link":"https:\/\/trusteconomics.eu\/index.php\/2021\/09\/23\/inflation-is-dynamically-back\/","title":{"rendered":"Inflation is Dynamically Back"},"content":{"rendered":"<p>Households and businesses in both the EU as well as in the US are now under strong inflationary pressures. The increase in inflationary pressures is directly related to the course of the pandemic. During 2020 because of the restrictive measures to tackle the pandemic Covid- 19 inflation fell.<\/p>\n<p>In the\u00a0context\u00a0of the\u00a0international economic recovery,\u00a0prices are rising with a tendency for further growth. But\u00a0as the international economy,\u00a0transport and supply chain are improved over time, prices will have to correct.<\/p>\n<p><strong>The worries<\/strong><\/p>\n<p>In practice, however, the economic planning of households is disorganized,\u00a0mainly in countries that have high energy costs and at the same time import energy,\u00a0due to imported inflation.<\/p>\n<ul>\n<li>If\u00a0the imported inflation is combined with the expansion of the creation of a trade deficit, then\u00a0the\u00a0lack of\u00a0competitiveness\u00a0shown\u00a0by these\u00a0fundamentals\u00a0will inevitably enter the prices of products.<\/li>\n<li>If a country or a country-member imports fuels\u00a0and energy then inevitably the aid of inflation will affect the total economy.\u00a0For\u00a0example, the\u00a0EU\u00a0is much more\u00a0expensive in\u00a0regards the\u00a0energy cost\u00a0compared to the US.<\/li>\n<li>The point is, energy price hikes will last for at least two years.<\/li>\n<li>By the end of the pandemic Covid-19 and the gradual opening of economies will cease to exist the political protection that is provided by governments to a large proportion of workers incomes, unemployed, businesses and farmers as it was occurred during the pick of the pandemic Covid- 19.<\/li>\n<\/ul>\n<p>The\u00a0households and small-medium business of low incomes and those that their incomes decreased due to the pandemic will face a big problem in terms of their basic cost of living.<\/p>\n<p><strong>ECB Policy<\/strong><\/p>\n<p>In conclusion we can say that an economy of a member country of\u00a0Eurozone for the smooth operation of the private sector, increase of the investment rate and management of public and national debt respectively, should have stability in inflation of about less than 2%.\u00a0The\u00a0statutory charter of\u00a0\u0395CB in terms of inflation it stipulates.<\/p>\n<p>Given that the President of the\u00a0ECB\u00a0identifies as the goal of\u00a0\u0395CB annual inflation 2% over time shows that will allow exceeding the target for annual inflation of 2% in long run horizon for as long as is needed and at the end of this\u00a0long run horizon inflation will return to below 2%.<\/p>\n<p><strong>The phenomenon of inflation<\/strong><\/p>\n<p>Rising inflationary pressures are an international phenomenon.<\/p>\n<p><strong>USA<\/strong><\/p>\n<p>In June &#8211; July 2021,\u00a0the US inflation moved to 5.4% per year.\u00a0The\u00a0corresponding period for 2020 was at 1% per year.<\/p>\n<p>In January 2021, it was 1.4% annually,\u00a0in April 2021 4.2%,\u00a0in June\u00a0&#8211;\u00a0July inflation was 5.4% per year.\u00a0While\u00a0in August 2021, it\u00a0stabilized at 5.3% per year.<\/p>\n<p><strong>EU\/Eurozone<\/strong><\/p>\n<p>In July 2021,\u00a0inflation reached 2.2% per year and in August 3% per year.<\/p>\n<p><strong>UK<\/strong><\/p>\n<p>In July 2021, inflation reached 2% per year and in August at 3% per year.<\/p>\n<p><strong>Germany<\/strong><\/p>\n<p>In August 2021,\u00a0inflation reached 3.9% per year, a decade-long record.\u00a0The record inflation in Germany is due to the increase of certain VAT rates.\u00a0The\u00a0green energy transition costs and its costs are\u00a0shared\u00a0accordingly.\u00a0The market system\u00a0pollutant transactions\u00a0has increased and prices have risen relative to other member-countries of\u00a0Eurozone.<\/p>\n<p>The tapering program may have been implemented by the\u00a0ECB\u00a0in quality terms the quantitative easing policy remains the same because now the ECB\u00a0buys the same quantities but only in government bonds rather than both of government and corporate bonds as before. That is\u00a0why Germany is pushing for a complete end to its monetary easing policy.<\/p>\n<p><strong>Energy Solutions to reduce inflation<\/strong><\/p>\n<p>As energy costs rise and especially in gas the situation tends to get out of control.\u00a0The international price of gas has increased by another 30% compared to\u00a0the existing increases that have taken place since\u00a0the beginning of the year.<\/p>\n<p>A solution to avoid high energy costs mainly from the increase in gas prices in\u00a0the international economy is:<\/p>\n<ul>\n<li>To restore the plants of electricity production which use in their production process coal, which is now cheaper than producing\u00a0the\u00a0electricity with the use of natural gas.<\/li>\n<li>To increase the electricity production by increasing the operation of nuclear power plants.<\/li>\n<\/ul>\n<ul>\n<li>Member governments to issue a green bond as Italian government did for financing the acceleration of the energy green transition.<\/li>\n<\/ul>\n<ul>\n<li>Direct and complete electrification of buses and taxis in the member-countries of the European Union.<\/li>\n<\/ul>\n<p>In this way our last two proposals will drastically reduce the huge size of the inveetment that should be made in renewable energy and energy storage technology in a very short time.<\/p>\n<p>Otherwise many small and medium-sized enterprises as well as low-income households due to high energy costs will find themselves in an extremely difficult position and with their budgets under even more pressure.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Households and businesses in both the EU as well as in the US are now under strong inflationary pressures. The increase in inflationary pressures is directly related to the course of the pandemic. During 2020 because of the restrictive measures to tackle the pandemic Covid- 19 inflation fell. In the\u00a0context\u00a0of the\u00a0international economic recovery,\u00a0prices are rising &hellip; <\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[19,6],"tags":[55,508,44],"class_list":["post-1009","post","type-post","status-publish","format-standard","hentry","category-economics","category-publications","tag-ecb","tag-energy","tag-inflation"],"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/trusteconomics.eu\/index.php\/wp-json\/wp\/v2\/posts\/1009","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/trusteconomics.eu\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/trusteconomics.eu\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/trusteconomics.eu\/index.php\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/trusteconomics.eu\/index.php\/wp-json\/wp\/v2\/comments?post=1009"}],"version-history":[{"count":1,"href":"https:\/\/trusteconomics.eu\/index.php\/wp-json\/wp\/v2\/posts\/1009\/revisions"}],"predecessor-version":[{"id":1010,"href":"https:\/\/trusteconomics.eu\/index.php\/wp-json\/wp\/v2\/posts\/1009\/revisions\/1010"}],"wp:attachment":[{"href":"https:\/\/trusteconomics.eu\/index.php\/wp-json\/wp\/v2\/media?parent=1009"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/trusteconomics.eu\/index.php\/wp-json\/wp\/v2\/categories?post=1009"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/trusteconomics.eu\/index.php\/wp-json\/wp\/v2\/tags?post=1009"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}