Inflation explained

Most economists agree that inflation of about 2% or 3% annually is a natural function of a growing economy. But people are worried government stimulus measures could spark much higher inflation. Paddy Hirsch explains. #MarketplaceAPM #EconomicExplainers #EconomicInflation
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Пікірлер: 275

  • @mayaharper4380
    @mayaharper4380 Жыл бұрын

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    Жыл бұрын

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    @indahlestari7633

    Жыл бұрын

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    Жыл бұрын

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    @Harry-tc2fy

    Жыл бұрын

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    @Harry-tc2fy

    Жыл бұрын

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  • @shazeemalli9110
    @shazeemalli91107 жыл бұрын

    I like your Inflation explanation. I never really understood why prices suddenly increase, thanks for explanations. Appreciate your time Sir.

  • @TheReapersSon
    @TheReapersSon2 жыл бұрын

    And here we are in 2022. The topic has never been more relevant!!!

  • @sanketkatariya4322
    @sanketkatariya43223 жыл бұрын

    Wonderful ! This explanation made it easy to understand a interestingly difficult concept. Thanks Paddy! :)

  • @abhinavitsmebellamy
    @abhinavitsmebellamy4 жыл бұрын

    Very well done, Sensei. Thank you!!

  • @demetrip
    @demetrip11 жыл бұрын

    This video has shed a lot of light, thank you !

  • @bobichina
    @bobichina13 жыл бұрын

    Thank you. Love your lectures

  • @HillbillyLeo
    @HillbillyLeo9 жыл бұрын

    thank you sir.

  • @joanarangel560
    @joanarangel5602 жыл бұрын

    Perfect explanation! Illustrations helped a lot. Thank you.

  • @matyasfilippi6242
    @matyasfilippi624210 жыл бұрын

    thank for uploading it! Made me understand:)

  • @tqmania12
    @tqmania1212 жыл бұрын

    Brilliant! Thank you.

  • @MrQazid
    @MrQazid13 жыл бұрын

    No matter what people say but the best way to teach is to engage the audience regardless of how they do it...this guy clearly knows how to do this. Great stuff! And really helpful.

  • @octdavian
    @octdavian15 жыл бұрын

    Another great video, Paddy !!!!

  • @wordsworth727
    @wordsworth72714 жыл бұрын

    Love the great information- Thanks!

  • @biowax
    @biowax13 жыл бұрын

    Great explanation in these financial videos. Makes me want to have a drink though.

  • @davidskomba7142
    @davidskomba7142 Жыл бұрын

    Thank you for sharing

  • @ChanningWearsSunscreen
    @ChanningWearsSunscreen5 ай бұрын

    watching this post 2020 means so much more. Thank you for your videos!!

  • @jimkidwell1531
    @jimkidwell15319 жыл бұрын

    No Inflation unless you eat food, use water, live in a house or apartment, heat your home, get sick, travel, pay car insurance, go to school, mail letters, or do your taxes

  • @FideTheProducer
    @FideTheProducer14 жыл бұрын

    Great video, well explained.

  • @JSJS23
    @JSJS2314 жыл бұрын

    excellent work, keep it up. I watch your videos when it is slow in the office

  • @handsupent_7919
    @handsupent_79193 жыл бұрын

    We are here folks

  • @radix3d
    @radix3d11 жыл бұрын

    Food and Fuel are left out because they are more volatile and lead to misleading inflation indicators. Inflation is not a price increase of one thing in the economy, but a price increase in everything in the economy.

  • @jennamillsap8220
    @jennamillsap82203 жыл бұрын

    This video ages WELL. 12 Years ago and here we are again.

  • @thanzrocx8762
    @thanzrocx87628 жыл бұрын

    thank you :)

  • @yaoypl
    @yaoypl6 жыл бұрын

    Like your act of throwing out the pen at the end😜

  • @user-xx2bj2xt9b
    @user-xx2bj2xt9b3 жыл бұрын

    Interesting time for me to watch it

  • @seanannigans
    @seanannigans2 жыл бұрын

    It took 12 years, another recession, massive job losses, supply chain interruptions, massive recovery, record low unemployment, record high job vacancies and a 5% rise in wages to finally trigger 8% inflation.

  • @ptrr-wdMhz
    @ptrr-wdMhz15 жыл бұрын

    Paddy excellent as always, what about a video explaining Auction Rate Securities

  • @shaylo2006
    @shaylo200615 жыл бұрын

    Thanks as allways! What about "Price Inflation",due to Commodity prices increasing and "Wage Deflation", due to a sluggesh economy and high unemployment?

  • @aroopsanyal3831
    @aroopsanyal38318 жыл бұрын

    The Government released USD 1 Trillion which was meant to increase public spending in the country, and in turn push demand for goods and services. If the banks are just sitting on the money what was the point of releasing those funds?

  • @gabs4557
    @gabs455711 жыл бұрын

    i love this guy!

  • @1601tgc
    @1601tgc12 жыл бұрын

    @Robbob9933 this is an important point but a point that is not necessary for the video. The video is simply to explain the concept of of inflation for those who do not understand it. Bringing in the element of what makes up the CPI (and the politics behind it) adds a level of complication and subjectivity that would take away from the core purpose of the video (i.e. explain the concept of inflation in a simple way that is easy to understand).

  • @meanmachinezzz
    @meanmachinezzz13 жыл бұрын

    Thanks a looot!

  • @MrHwilRRR
    @MrHwilRRR10 жыл бұрын

    I liked the ending. XD Plus I learnt something new.

  • @psychicopus
    @psychicopus12 жыл бұрын

    You are awesome...I wish you were my prof!

  • @amina555
    @amina55512 жыл бұрын

    i love this guy:)

  • @wixielane8513
    @wixielane85133 жыл бұрын

    You are amazing

  • @InstTaxSolutionsLLC
    @InstTaxSolutionsLLC10 жыл бұрын

    Good point that rising prices do not necessarily mean the money supply is increased to much. It can depend on a variety of other factors.

  • @sahazadshad
    @sahazadshad13 жыл бұрын

    wow!! impressive~~!!!

  • @IAmKidPain
    @IAmKidPain9 жыл бұрын

    Very informative.

  • @alex94115
    @alex9411513 жыл бұрын

    The idea that inflation is based on wage increases is so 1970's... we are talking about commodity driven inflation - cost of goods going up dramatically (look at commodity prices at all levels) and also a loss of faith in currency = hyperinflation. Not "money flowing through the system"

  • @icyborg6065
    @icyborg60654 жыл бұрын

    To me inflation is when a 600 pound gorilla becomes an 84 pound moribund gorilla, the purchasing power is weaken.

  • @innovatorsbuzz
    @innovatorsbuzz12 жыл бұрын

    Instead of CPI ,Should'nt we consider WPI(Whole sale price index ) Index as factor for measure ?

  • @matrix1951
    @matrix195111 жыл бұрын

    Could you do a video on the gold standard?

  • @Dusibello
    @Dusibello10 жыл бұрын

    These work great for my high school econ classes. Just wish so many did not end with a plug for alcohol...

  • @dimitrious19
    @dimitrious1911 жыл бұрын

    ON a minute 5.05 you said that banks now don't pass the money to borrowers so that these borrowers cannot spend more? Can you explain that pls. cause on the one hand interest rate is almost 0% on the other hand banks don't borrow - I have been stuck there - thanks!

  • @zieperegrine5237
    @zieperegrine523710 жыл бұрын

    Thnx for the information I got a high mark because of this video :D

  • @milanese232
    @milanese23210 жыл бұрын

    Patty great explanation! thank you for sharing. I just dont quite understand the role of the banks. What I've learned is that banks don't sit on the money the Govt gives them. Instead, they CREATE money out of nothing thanks to the fractional reserve model in which they operate.

  • @Aravinthmech
    @Aravinthmech4 жыл бұрын

    We live in a society where everything is manipulated.

  • @dollar4shawn
    @dollar4shawn14 жыл бұрын

    When people talk about inflation, they generally mean ONE OF TWO things: a) expansion of the money supply (monetary inflation), or b) a rise in the average price level of goods (price inflation). Whether or not the CPI is a good INDICATOR of the latter, or the former, is often debated. The CPI is an index, & many economists would argue that it's geared to under-report inflation (since for example, it leaves out food & energy). Some would argue that the price of gold is a better indicator.

  • @buggieboi1988
    @buggieboi198811 жыл бұрын

    Love it when he throws that marker and goes for a drink.

  • @daemonk9
    @daemonk911 жыл бұрын

    Taxation= creating a conducive environment for business; security, infrastructure and a prepared workforce= lower prices even more

  • @gjh3601
    @gjh360112 жыл бұрын

    when would we get an increased misery index (stagflation)

  • @libstomper4238
    @libstomper423810 жыл бұрын

    Inflation is insidious, buy gold, silver, lead and food.

  • @Fiscus128
    @Fiscus12813 жыл бұрын

    Even more simple: Before QE Money in system : $1000 Average income: $100 Goods / services in system : 1000 Price per unit: $1 After QE ($1000) Average income: $100,- Money in system : $1000 + $1000 = $2000 Goods/serviices in system: 1000 Since the value of the goods or productivity has not been increased, now the price per unit increases to $2,- once the money gets into the real economy. Inflation = 2/1 = 100%, so real spending power drops with 50% (100/2 = 50%). .

  • @ixus1001
    @ixus100110 жыл бұрын

    Are CPI's uniform across the globe?

  • @billyjoeallen
    @billyjoeallen15 жыл бұрын

    there is little sign of price inflation year over year. with less construction and lower inventory demands, there is a corresponding drop in demand for most commodities.

  • @utkarshpande11
    @utkarshpande1110 жыл бұрын

    sir, you meant disinflation there right? anyhow just saying here..nice video.

  • @trentable
    @trentable13 жыл бұрын

    The concept is that there is a limited number of goods and services to buy. The more money people have to buy limited resources with, the more expensive those resources will get. The idea behind stimulus is that by making stuff more expensive people will start producing more to take advantage of high prices. The problem is that stimulus usually feeds into distortions and bubbles. The system becomes unstable, then gradually unsustainable. The correction then causes recessions.

  • @MB4.23
    @MB4.2311 жыл бұрын

    The price of food and fuel has stayed relatively the same to CPI over the long term. Food and fuel are treated differently because their inherent risk/unstable nature make it impossible to accurately price in a fair way in order to determine inflation.

  • @SC_XOLOs
    @SC_XOLOs4 жыл бұрын

    10 years later, it happened. And here to prove it. Stock market is horrible

  • @Tai91827
    @Tai918277 жыл бұрын

    Gold and silver is real money

  • @declanconnor5042
    @declanconnor50429 жыл бұрын

    Superb explanation paddy. Well played.

  • @Robbob9933
    @Robbob993312 жыл бұрын

    Poster needs to correct a major point, the Obama Administration removed food and fuel prices from the reported CPI. These are the two largest drivers of the cost of living. During the Obama Administration fuel prices have increased between 150% and 200%. Food prices are a bit tricky. The price for a box may remain the same but the amount contained in the box decreases. Say the medium sized box of cereal costs $4. It used to contain 18 ounces but now contain 14 ounces.

  • @Thewizzardof9
    @Thewizzardof912 жыл бұрын

    so the bottom line is greed causes inflation. It is not because the dollar has lost value it is because people want to over consume. this falls inline with the fact the dollar had gained 450% in value over the last 60 years and remains strong.

  • @sha370z
    @sha370z11 жыл бұрын

    buying power has to do on how much space you have and price say you had $70,000 cash how much can you buy with no house ?

  • @DCUPtoejuice
    @DCUPtoejuice12 жыл бұрын

    @ryan84160 since we are in a money debt system, the debt has to be created somewhere to increase money supply and it is best to put that money directly into the hands of the people instead of into the banks who refuse to loan it out.

  • @yeshuasage3724
    @yeshuasage372412 жыл бұрын

    what country is he from, and adressing?

  • @durhamdf
    @durhamdf13 жыл бұрын

    simple, whe nthe economy recovers and banks start lending out again the fed should enact contractionary policy, (selling treasuries) in effect "destroying" money and keeping inflation low. However, because it is difficult to determine exactly when the economy has "recovered" the fed will probably keep expansionary policy going to long and there will probably be mild inflation, Between 4-5%

  • @supernatural787
    @supernatural7873 жыл бұрын

    How does the govt siphon the money back, can you pls explain? Great video btw thx so much!

  • @MONEYANDTIME
    @MONEYANDTIME3 жыл бұрын

    Although too much inflation is a problem, deflation is an even greater problem to the economy. So much stimulus check and money have been pumped into the economy to mainly avoid a massive deflation. If inflation does not follow, more and more money will be pumped into the economy, basically until we all start spending.

  • @susuvekerekere563
    @susuvekerekere5632 жыл бұрын

    👍

  • @EJWProduction
    @EJWProduction13 жыл бұрын

    @EJWProduction **Future earning potential** is a better way of putting it.

  • @2010blufish
    @2010blufish13 жыл бұрын

    Check out the video Collapse of the Dollar 2012!

  • @frankm.d1479
    @frankm.d14794 жыл бұрын

    Anybody watching this today? LOL

  • @christopheradderley6902
    @christopheradderley690213 жыл бұрын

    For those interested in the subject of inflation, look up Milton Friedman!

  • @Nandisuria3
    @Nandisuria39 жыл бұрын

    Paddy I might be in love with you.

  • @luciddream5055

    @luciddream5055

    2 жыл бұрын

    😏

  • @enigma067
    @enigma06710 жыл бұрын

    They're doing the same thing today as they did that caused the great depression. Only this time, it will be worse because people back then didn't have credit cards.

  • @kabilan7940
    @kabilan79402 жыл бұрын

    This was made 12 years ago ...makes me wonder

  • @lrozenwater
    @lrozenwater11 жыл бұрын

    A low and stable rate of inflation is BENEFICIAL for an economy, not dangerous, given that the reason for inflation is an increase in aggregate demand, and not excess monetary growth.

  • @godspawn007
    @godspawn00713 жыл бұрын

    @durhamdf a separate issue I see is that this country as a whole loves to push its overall wealth or lack thereof down the road to future generations. We love to operate on credit lines rather than do the responsible thing and not purchase things we actually cant afford. What happens when those credit lines dry up or pull too thin? We're seeing this right now, yes? Do we as a nation need to think better about money in general? What about the abundance of lawyers, beaurocrats, BAD yes or no?

  • @zelmiracholevova184

    @zelmiracholevova184

    4 жыл бұрын

    godspawn007 , see USSR, credit lines dried up. Their collapse sealed and realized.

  • @vanskiid
    @vanskiid13 жыл бұрын

    @ryan84160 you are correct

  • @RK-wp3bt
    @RK-wp3bt3 жыл бұрын

    ♥️

  • @EJWProduction
    @EJWProduction13 жыл бұрын

    @heartlessvietboy Reading back, you say inflation is caused by greed. That's a bold statement. I guess peoples' greed increases at a steady rate to, about .3 percent every year. I said inflation is caused by government printing money, and that is an unarguable fact. If you have a problem with that, well then you're just going to have to do some research. Business owners wish they could be a greedy as you accuse them of, but competition says they can't. Ultimately, consumers chose what to spend

  • @durhamdf
    @durhamdf13 жыл бұрын

    @godspawn007 Inflation does destroy the value of money, but at the natural rate of inflation, it is keeping up perfectly with the growth in output and wages will keep up. Inflation beyond the natural rate is what we actually experience, which we are not at yet, and actually does benefit the lower/middle class debtors against the big creditors. The Fed is "independent" but the president and congress can replace the board of governors on staggered terms, because of this the Fed is politicized

  • @oJKBo
    @oJKBo11 жыл бұрын

    actually they aren't included because food and fuel prices are constantly changing

  • @alehud
    @alehud15 жыл бұрын

    it's rarely that there is just one reason behind a rise in inflation.

  • @GordonGarvey
    @GordonGarvey9 жыл бұрын

    So how does inflation occur in the free market without the government intervening?

  • @biglune8381
    @biglune83813 жыл бұрын

    Here in 2021 and it happened

  • @bowchikabowbow
    @bowchikabowbow12 жыл бұрын

    @dishesdealer417 Actually the CPI does include food in it. bls.gov/news.release/cpi.nr0.htm You're thinking of core inflation, which strips out energy and food prices.

  • @zigggzaggg
    @zigggzaggg Жыл бұрын

    It might be stupid to ask but why can't the gov put limits on the price of each goods and services so even if there is huge money supply the sellers can't increase the prices beyond a limit, and the gov can say that they should increase prices only for a valid reason such as raw material price increase or something and check it whether it's truth by sending any officers, so inflation doesn't occur, anyone???

  • @calvertwilliamson4721
    @calvertwilliamson47218 ай бұрын

    It did not happen the way you said it would. Instead, we have high inflation because of billionaires’ tax cuts, and truckers chasing a box of cereal with less cash.

  • @LucyLabrador1
    @LucyLabrador111 жыл бұрын

    Maybe this is why the UK government isn't increasing spending during this recession...

  • @IIIIALBYIIII
    @IIIIALBYIIII4 жыл бұрын

    Inflation vs supply and demand....I still dont understand?

  • @serialcomplexity
    @serialcomplexity11 жыл бұрын

    Siphon = taxation

  • @anubm983
    @anubm9837 жыл бұрын

    what is creep inflation

  • @reneamarcus5882

    @reneamarcus5882

    7 жыл бұрын

    describes a situation where prices rose a few percentages on average each year

  • @Robbob9933
    @Robbob993312 жыл бұрын

    @dishesdealer417 Back in the 1970s, they would actually inventory shopping carts.

  • @trentable
    @trentable13 жыл бұрын

    @heartlessvietboy I think that prices would probably be falling if it wasn't for stimulus and currency inflation.

  • @Unprotected1232
    @Unprotected12328 жыл бұрын

    Can't deflation due to QE occur because the private sector is paying down debt rather than entering the circuit of money?

  • @JimBCameron

    @JimBCameron

    8 жыл бұрын

    +Bob “Bobsiken” Olsemann What do you mean by 'the private sector is paying down the debt'?

  • @tellyontellyon
    @tellyontellyon13 жыл бұрын

    We are being made poorer and poorer. It can't go on like this.