Bret+L

=__Expert Contact __=

Dr. Heath
Economics Professor at UC

=Questions I asked = When and Why did The inflation start? What is the government doing to stop inflation? What are the running presidents planning on doing with inflation? Why does inflation go up during the war? Would inflation be a main cause of economical downfall? How is inflation related to prices, crises, and how much people buy goods and services?

Answers to questions
When and why did The inflation start?

People tend to think that inflation has always been with us, but that's not true. The price level has gone up and down, historically. What we think of as inflation has only been with us consistently since the Great Depression. The Depression caused people to start thinking about the economy as a factor in their lives, where before they really didn't. Once they started paying attention to things like unemployment and inflation, they started to expect things. For example, when prices started rising, people started to expect that prices would continue to rise, so they had that built-in expectation that there would be inflation. When they negotiated with their employers about their wages and salaries, they built that expectation in, which meant that businesses had to keep raising their prices on goods and services because they were paying higher and higher salaries to their workers. It's a spiral.  What is the government doing to stop inflation?

We don't have an inflation problem now--it's only about 2%. But if we did have an inflation problem, the government could try to put the brakes on the economy--inflation can be caused by an economy that's growing too quickly--too much money in the economy. So, to slow it down, the government can try to take some of that money back out--like raising taxes, reducing government spending, the Federal Reserve could raise the interest rate so people would save more--those kinds of things.  Why does inflation go up during the war?

Inflation goes up during times of war because wars are very expensive and the government is spending a lot of money to sustain the war. When the government pumps a lot of money into the economy, it causes the economy to grow quickly--see the answer above.  Would inflation be a main cause of economical downfall?

It could be. There have been some countries that have experienced inflation rates of 400% and higher. This means that their currency is becoming worthless. In these cases, the country can become very unstable, politically.  How is inflation related to prices, crises, and how much people buy goods and services?

<span style="background-color: rgba(255,255,255,0.917969); color: #222222; font-family: arial,sans-serif;">By definition, inflation is a sustained increase in the price level, so if we're in a period of high inflation, that means that in general, prices are rising. It doesn't mean that the price of everything is increasing. When inflation is very high, it leads to a lot of instability, as I said above. People find that they can't buy things from one day to the next for the same amount of money. If currency becomes worthless then people lose faith in their government. If their wages don't keep up with inflation, then then can buy fewer and fewer goods and services.

=<span style="font-family: Arial,Helvetica,sans-serif; font-size: 140%;">__Inflation facts and Websites__ =

=__Facts about Roman inflation__=

As the soldiers wages went up, they silver in coins went down because the soldiers were getting payed a lot more denerri

Emperors debased the denerri (took out most the silver) and just had an outer coat

Rome was losing money, at the end of the five good emperors they had no money.

Rome was losing money because the taxes weren't being payed in denerri

People sold themselves into slavery to avoid taxes

Inflation was bad enough that the 100% silver denerri was only .02%

Rome ran out of money leading to one of the major points in Rome’s downfall

When the silver was reduced to .02% the inflation was 15,000%

=__Facts about Current inflation__=

<span style="color: #000000; font-family: 'Times New Roman',serif;"> The federal reserve is trying to stop inflation by making less money.

<span style="color: #000000; font-family: 'Times New Roman',serif;">It is shown that during the wars the money goes up.

<span style="color: #000000; font-family: 'Times New Roman',serif;">When prices goes up, inflation goes down.

<span style="color: #000000; font-family: 'Times New Roman',serif;">20 hyperinflation have happened since 1980

<span style="color: #000000; font-family: 'Times New Roman',serif;">The United States has experienced two currency collapses due to inflation.

<span style="color: #000000; font-family: 'Times New Roman',serif;">The dollar has lost 21% of its purchasing power in the last decade

<span style="color: #000000; font-family: 'Times New Roman',serif;">The top 5 inflation periods in the U.S are Wars

=<span style="font-family: 'Times New Roman',serif;">Citation =

Gill, N. S.. "Economic Reasons for the Fall of Rome." // About.com //. About.com, 2011. Web. 7 Feb 2012. <http://ancienthistory.about.com/od/fallromeeconomic>

. // National inflation association //. N.p., 2011. Web. 7 Feb 2012. <http://inflation.us/charts.html>

. // U.s. bureau of labor statistics //. N.p., n.d. Web. 7 Feb 2012. <http://useconomy.about.com/od/inflationfaq/f/Control_Infla.htm>.

=<span style="background-color: #ffffff; font-family: Arial,Helvetica,sans-serif; font-size: 150%;">__Final project__ =

History of standard of living and how inflation effects it.




 * [] ( Cool interactive chart with interactive moment) **