ترجمه متون اقتصادی، متن سوم

Inflation

Today the control of inflation is given priority in governments’ policy. To appreciate why, we have to look at the effects of rising prices or - what is the same thing- a fall in the value of money. It is then necessary to consider the causes of inflation and the possible remedies that can be applied.

Possible Benefits

At one time a gently rising price level was not viewed with too much concern. It improved the climate for investment and so helped to maintain aggregate demand. Moreover, it tended to reduce the real burden of servicing the national debt: while interest payments are fixed in money terms, receipts from taxation increase as money national income rise.

            The snag, however, is that, once started, the rise in prices is difficult to contain. At first it becomes uncomfortable, producing undesirable results, both internal and external. Eventually the rate of inflation increases. The situation is then serious, for it is much more difficult to reverse the trend. Indeed it can develop into runaway inflation.

Internal Disadvantage

1. Income is redistributed arbitrary. Not only does inflation reduce the standard of living of persons dependent on fixed incomes, e.g. pensioners, but it benefits debtors and penalizes lenders (unless the loan is inflation-proofed). Thus the stability upon which all lending and borrowing depends is undermined.
2.  Interest rates rise, both because people require a higher reward for lending money which is falling in value and also because the government is forced to take disinflationary measures.
3. Investment is discouraged by government anti-inflation policy. In practice, controls imposed on prices are more effective than those on costs, particularly wages. The result is an erosion of profits and a disincentive to invest.
4. Saving is discouraged because postponing consumption simply means that goods cost more if bought later.
5. Inflation generates industrial and social unrest since there is competition for higher incomes. Thus, because of rising prices, trade unions ask for annual wage rises. Often, demands exceed the rate of inflation, anticipating future rises or seeking a larger share of the national cake to improve their members’ real standard of living. Those with the most muscle gain at the expense of weaker groups.
6. The rate of inflation tends to increase, largely because high wage settlements in anticipation of higher future prices help to bring about the very rise which people fear.