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how to fight inflation.PDF

how to fight inflation

刀疤杰
2011-02-23 0人阅读 0 0 0 暂无简介 举报

简介:本文档为《how to fight inflationpdf》,可适用于经济金融领域

HowtofightinflationIntroductionFactsheetNointhisseriesindicatesthatinflationisaprocessofcontinuousincreaseinthegeneralpricelevel,andthatinflationisbadfortheeconomyandforthegeneralpublicHowdoyoustopinflationOneapproachtostopinflationwouldbetofreezeallpricesManycountrieshaveattemptedthisoverthecenturiesForexample,intheyear,theRomanemperorDiocletianfrozeallpricesandwagesandmadetheinfringementofthisedictpunishablebydeathInspiteofsomeexecutions,inflationwasnotcontainedEventuallythislawagainstpriceandwageincreaseswasrepealedLaterattemptsatdirectlycontrollingpriceincreasesalsofailedbecauseallthesecontrolsaddressedthesymptoms,butnotthecauseWhattriggerspriceincreasesPriceincreasescanbetriggeredbymanydevelopments,suchas:•anincreaseininternationaloilprices•afallintheexchangerate•anationwideexcessivesalaryandwagehikeor•anincreaseinfoodpricescausedbyadroughtWhatsustainsinflationForacontinuousriseinthegeneralpricelevel,themoneysupplyhastokeeponexpandingOnlywith"toomuchmoneychasingtoofewgoods"canthegeneralpricelevelcontinuetoincreaseGraphclearlyillustratesthathighratesofgrowthinthemoneysupplyinSouthAfricainthepastwenthandinhandwithhighratesofinflationTheonlyeffectivewaytocontaininflationinthelongrunisthereforetorestrictthegrowthinthemoneysupplyThelikelyrateofincreaseinthequantityofgoodsandserviceswhichcanbemaintainedwithoutinflationarypressuresisusuallyrelatedtomorelabour,entrepreneurshipandcapitalgoods,andbetterskills,managementandtechnologyGrowthinthemoneysupplyshouldaccordinglybelinkedtosustainablegrowthinproductionPreventingexcessivemoneysupplygrowthisthereforeacrucialelementincombatinginflationButhowisthisdoneGraph:MoneysupplygrowthandinflationinSouthAfricaMoneysupplygrowthandinflationinSouthAfricaPercentagechangeoveroneyearyearmovingaverageMoneysupplygrowthInflationPreventingexcessivemoneysupplygrowthThebanksinSouthAfricaareusuallyindebtedtotheSouthAfricanReserveBank(theBank)AlthoughtheamountoffundswhichtheyborrowfromtheBankissmallcomparedtotheamountoffundswhichtheyobtainintheformofdeposits,theirborrowingfromtheBankisimportantThisisbecausetheBankistheonlysupplieroflegaltender–notesandcoin–totheeconomyThetermsandconditionsunderwhichtheBankiswillingtosupplycashtothebanksareimportantfactorswhenthebankssettheirinterestratesTheBanklendscashtothebanksataninterestratedeterminedbytheBank'sMonetaryPolicyCommitteeThisinterestrateiscalledtheBank'srepurchaserate,orreporateforshortBankssettheirdepositinterestratessomewhatbelowandtheirlendingratessomewhatabovethereporateThroughthereporate,theBankindirectlyhasastronginfluenceonalltheshortterminterestratesinthebankingsystemIftheBank'sanalysisshowsthatinflationisgoingtobehigherthantheinflationtargetsetbythegovernment,ithastoputabrakeontheinflationprocessThisisdoneinthefollowingway:•TheBankraisesthereporate•Banksthereafterusuallyraisetheirlendinganddepositrates•Whenpeoplefacehigherlendingrates,theybuyfewergoodsoncredit•Thiscauseslesscredittobeusedandlessmoneyendingupwithshopkeepers•Withlessmoney,creditandexpenditureintheeconomy,itbecomesmoredifficulttoraisepricesandwages•Therefore,inflationisreducedConversely,iftheBank'sreadingoftheeconomyindicatesthatinflationisgoingtofallbelowtheinflationtarget,itwouldreducethereporateandthiswouldreversethesequencedescribedaboveAsaruleofthumb,lendingratesmustbesignificantlyhigherthantheinflationrateifexcessivecreditgrowthandmoneysupplygrowtharetobepreventedInadditiontothereporate,theBankcanalsoinfluencethebanks'abilitytolendoutmoneybyusinginstrumentssuchasopenmarketoperations(iebuyingandsellingfinancialassetsintheopenmarket)andcashreserverequirements(ierequiringthebankstodepositpartofthefundstheyreceivefromthepublicwiththeReserveBank)Althoughinflationcanonlybesustainediftheamountofmoneyinthecountryisrisingexcessively,theReserveBank'staskcanbemadeeasierbyboththegovernmentandthepublicMonetarypolicywillbemoreeffectiveifitissupportedbyfiscaldiscipline,ieifthegovernmentdoesnotoverspendorrapidlyrunupitsdebtInflationarypressureswillalsobealleviatedifthegeneralpublicworksharderandsmarter,ieifanimprovementinproductivityraisesthequantity(orquality)ofthegoodsandservicesproducedBottomlineCombatinginflationrequiresthepreventionofexcessivemoneysupplygrowthInturn,thisrequirestheprivatesectorbankstomaintaininterestratesatlevelsthatarehighenoughtopreventexcessivegrowthinbankcreditextensionTothisend,theBanksetsitsrepurchaserateatanappropriatelevelThiswholeprocessofchanginginterestratestoinfluencecredit,moneysupplyandinflationtakestimetoworkthroughthisiswhymonetarypolicyrequirespatienceThisisthethirdinaseriesoffactsheetsontheSouthAfricanReserveBank,compiledbytheResearchDepartment:InformationDivisionanddistributedbytheExecutiveManagementDepartment:CommunicationsUnitAvailable:http:wwwreservebankcozaForfurtherinformationonthecontentortoobtainprintedhardcopies:ClickonthecontactusicontosubmityourrequestToaccessanelectroniccopyofthisfactsheet:ClickonAboutus>FactsheetsThecontentofthisfactsheetissubjecttochangeatanytimeLastupdated:July

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