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In almost 40 years, States The United States has not experienced significant inflation , but that may change soon, due to a large-scale federal deficit, suppressed demand due to quarantine restrictions and a change in policy. monetary policy of the Federal Reserve.
But what exactly is inflation?
The Inflation is the opposite of deflation, which is a decrease in price levels.
Since the financial crisis of 2008, the US economy has experienced very low inflation and even deflation. Outside of some sectors, such as healthcare, people in the US haven’t had to deal with many price increases.
However, this 2021, US locals are likely to see prices skyrocket in a good variety of sectors , thanks in part to COVID vaccines – 19 that will likely drive demand for tourism travel and sporting events, according to Yahoo .
Hyperinflation, which is generally defined as inflation greater than 50%, it is destructive to an economy. In recent years, hyperinflation has destroyed the economies of countries such as Zimbabwe, Venezuela and Argentina.
But you should not worry about this happening in the US ., since the inflation expected in the United States in 2021 is 2% to 4%, not close to what is expected in Venezuela for 2021, which is for 438% .
On the other hand, there could be some good things with moderate inflation. When it happens, high prices in the economy encourage companies to invest and expand. Interest rates go up, so banks start paying interest on checking accounts again. And the higher wages, which will occur in certain sectors of the labor market, give workers an incentive to spend more money .
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