An Analysis on Inflation in U.S.A. – Causes, It’s Impacts, Trends and Measures to Control

Abstract

Growth with stability is an essential condition for attaining sustainable economic development. Fluctuations in prices create an atmosphere of uncertainty which is not conducive to developmental activities. Inflation means paying more for goods than paying earlier. The cost of essential and non-essential goods both sees a hike. The price of everything goes up over time and this phenomenon is called inflation and the rate at which the prices of everything go up is called the "rate of inflation". For example, if the price of something is $10 this year and next year the price becomes approximately $11 then the rate of inflation is 10%.The present article made an attempt to assess the issues relating to inflation such as relationship between Money supply and Inflation, What causing inflation in 2022?, Impact of inflation (Less purchasing power, Less savings, Paying higher taxes, More employment and better income and more particularly on common man), Measures of Inflation ( Consumer Price Index (CPI) and Personal Consumption Expenditure (PCE)). Historical Statistics of Inflation in U.S from 1980-2020 and Current Scenario of Inflation in U.S (in particular from 2020 to 2022), Methods to control Inflation such as Monetary policy, Open Market Operations, Fiscal Policy, Fed Fund Rates. The study examines that increasing price level could lead to fall in Purchasing power of the Dollar; commuting budget has increased for most of the middle class. Fixed income groups will be hit the hardest because their salaries will not be revised to include the cost of living even as prices of items soar. Inflation has affected badly the life of middle and poor class. Finally it concludes that, controlling inflation is needs tremendous, effective and long term policies of the government. Inflation has been properly been curbed or averted the world economy with experience of new face on employment policies and have a new breath on the standard of living around the globe.