consequences of inflation essay grade 12

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Inflation - Consequences of Inflation

Last updated 21 Mar 2021

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What are some of the main consequences of inflation?

Many governments have set their central banks a target for a low but positive rate of inflation . They believe that persistently high inflation can have damaging economic and social consequences .

Income redistribution : One risk of higher inflation is that it has a regressive effect on lower-income families and older people in society. This happen when prices for food and domestic utilities such as water and heating rises at a rapid rate
Falling real incomes : With millions of people facing a cut in their wages or at best a pay freeze, rising inflation leads to a fall in real incomes.
Negative real interest rates : If interest rates on savings accounts are lower than the rate of inflation, then people who rely on interest from their savings will be poorer. Real interest rates for millions of savers in the UK and many other countries have been negative for at least four years
Cost of borrowing : High inflation may also lead to higher borrowing costs for businesses and people needing loans and mortgages as financial markets protect themselves against rising prices and increase the cost of borrowing on short and longer-term debt. There is also pressure on the government to increase the value of the state pension and unemployment benefits and other welfare payments as the cost of living climbs higher.
Risks of wage inflation : High inflation can lead to an increase in pay claims as people look to protect their real incomes. This can lead to a rise in unit labour costs and lower profits for businesses
Business competitiveness :If one country has a much higher rate of inflation than others for a considerable period of time, this will make its exports less price competitive in world markets. Eventually this may show through in reduced export orders, lower profits and fewer jobs, and also in a worsening of a country’s trade balance. A fall in exports can trigger negative multiplier and accelerator effects on national income and employment.
Business uncertainty : High and volatile inflation is not good for business confidence partly because they cannot be sure of what their costs and prices are likely to be. This uncertainty might lead to a lower level of capital investment spending.

Overall, a high and volatile rate of inflation is widely considered to be damaging for an economy that trades in international markets. In your analysis focus on the impact on

Uncertainty / business and consumer confidence
The competitiveness of producers in international markets
The effects on the real standard of living
The possible impact on levels of income inequality

Deflation (negative inflation) can also be damaging for a country. You can read more about deflation in this study note.

Potential winners from rising inflation

Workers with strong wage bargaining power (perhaps those who belong to strong trade unions). They can protect their real incomes by bidding for higher wages.
Debtors if real interest rates on loans are negative – the real value of debt may fall.
Producers if their prices rise faster than costs leading to higher profit margins.
Wealthy groups if there is a sustained period of asset price inflation (e.g. stocks and property).

Potential losers from rising inflation

Retired people on fixed incomes – inflation cuts the real value of their pensions and other savings.
Lenders if real interest rates on loans are negative.
Savers if real returns on commercial bank deposits are negative.
Workers in low-paid jobs with little bargaining power e.g. those in the Gig Economy with no union protection.
Exporting firms may lose sales and profits if they become less competitive – eventually hitting shareholders.

Inflation - Key Term Glossary

consequences of inflation essay grade 12

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Essay on Inflation: Types, Causes and Effects

Essay on Inflation!

Essay on the Meaning of Inflation:

Inflation and unemployment are the two most talked-about words in the contemporary society. These two are the big problems that plague all the economies. Almost everyone is sure that he knows what inflation exactly is, but it remains a source of great deal of confusion because it is difficult to define it unambiguously.

Inflation is often defined in terms of its supposed causes. Inflation exists when money supply exceeds available goods and services. Or inflation is attributed to budget deficit financing. A deficit budget may be financed by additional money creation. But the situation of monetary expansion or budget deficit may not cause price level to rise. Hence the difficulty of defining ‘inflation’ .

Inflation may be defined as ‘a sustained upward trend in the general level of prices’ and not the price of only one or two goods. G. Ackley defined inflation as ‘a persistent and appreciable rise in the general level or average of prices’ . In other words, inflation is a state of rising price level, but not rise in the price level. It is not high prices but rising prices that constitute inflation.

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It is an increase in the overall price level. A small rise in prices or a sudden rise in prices is not inflation since these may reflect the short term workings of the market. It is to be pointed out here that inflation is a state of disequilibrium when there occurs a sustained rise in price level.

It is inflation if the prices of most goods go up. However, it is difficult to detect whether there is an upward trend in prices and whether this trend is sustained. That is why inflation is difficult to define in an unambiguous sense.

Let’s measure inflation rate. Suppose, in December 2007, the consumer price index was 193.6 and, in December 2008 it was 223.8. Thus the inflation rate during the last one year was 223.8 – 193.6/193.6 × 100 = 15.6%.

As inflation is a state of rising prices, deflation may be defined as a state of falling prices but not fall in prices. Deflation is, thus, the opposite of inflation, i.e., rise in the value or purchasing power of money. Disinflation is a slowing down of the rate of inflation.

Essay on the Types of Inflation :

As the nature of inflation is not uniform in an economy for all the time, it is wise to distinguish between different types of inflation. Such analysis is useful to study the distributional and other effects of inflation as well as to recommend anti-inflationary policies.

Inflation may be caused by a variety of factors. Its intensity or pace may be different at different times. It may also be classified in accordance with the reactions of the government toward inflation.

Thus, one may observe different types of inflation in the contemporary society:

(a) According to Causes:

i. Currency Inflation:

This type of inflation is caused by the printing of currency notes.

ii. Credit Inflation:

Being profit-making institutions, commercial banks sanction more loans and advances to the public than what the economy needs. Such credit expansion leads to a rise in price level.

iii. Deficit-Induced Inflation:

The budget of the government reflects a deficit when expenditure exceeds revenue. To meet this gap, the government may ask the central bank to print additional money. Since pumping of additional money is required to meet the budget deficit, any price rise may be called deficit-induced inflation.

iv. Demand-Pull Inflation:

An increase in aggregate demand over the available output leads to a rise in the price level. Such inflation is called demand-pull inflation (henceforth DPI). But why does aggregate demand rise? Classical economists attribute this rise in aggregate demand to money supply.

If the supply of money in an economy exceeds the available goods and services, DPI appears. It has been described by Coulborn as a situation of “too much money chasing too few goods” .

Note that, in this region, price level begins to rise. Ultimately, the economy reaches full employment situation, i.e., Range 3, where output does not rise but price level is pulled upward. This is demand-pull inflation. The essence of this type of inflation is “too much spending chasing too few goods.”

v. Cost-Push Inflation:

Inflation in an economy may arise from the overall increase in the cost of production. This type of inflation is known as cost-push inflation (henceforth CPI). Cost of production may rise due to increase in the price of raw materials, wages, etc. Often trade unions are blamed for wage rise since wage rate is not market-determined. Higher wage means higher cost of production.

Prices of commodities are thereby increased. A wage-price spiral comes into operation. But, at the same time, firms are to be blamed also for the price rise since they simply raise prices to expand their profit margins. Thus we have two important variants of CPI: wage-push inflation and profit-push inflation. Anyway, CPI stems from the leftward shift of the aggregate supply curve.

The price level thus determined is OP 1 . As aggregate demand curve shifts to AD 2 , price level rises to OP 2 . Thus, an increase in aggregate demand at the full employment stage leads to an increase in price level only, rather than the level of output. However, how much price level will rise following an increase in aggregate demand depends on the slope of the AS curve.

Causes of Demand-Pull Inflation :

DPI originates in the monetary sector. Monetarists’ argument that “only money matters” is based on the assumption that at or near full employment, excessive money supply will increase aggregate demand and will thus cause inflation.

An increase in nominal money supply shifts aggregate demand curve rightward. This enables people to hold excess cash balances. Spending of excess cash balances by them causes price level to rise. Price level will continue to rise until aggregate demand equals aggregate supply.

Keynesians argue that inflation originates in the non-monetary sector or the real sector. Aggregate demand may rise if there is an increase in consumption expenditure following a tax cut. There may be an autonomous increase in business investment or government expenditure. Governmental expenditure is inflationary if the needed money is procured by the government by printing additional money.

In brief, an increase in aggregate demand i.e., increase in (C + I + G + X – M) causes price level to rise. However, aggregate demand may rise following an increase in money supply generated by the printing of additional money (classical argument) which drives prices upward. Thus, money plays a vital role. That is why Milton Friedman believes that inflation is always and everywhere a monetary phenomenon.

There are other reasons that may push aggregate demand and, hence, price level upwards. For instance, growth of population stimulates aggregate demand. Higher export earnings increase the purchasing power of the exporting countries.

Additional purchasing power means additional aggregate demand. Purchasing power and, hence, aggregate demand, may also go up if government repays public debt. Again, there is a tendency on the part of the holders of black money to spend on conspicuous consumption goods. Such tendency fuels inflationary fire. Thus, DPI is caused by a variety of factors.

Cost-Push Inflation Theory :

In addition to aggregate demand, aggregate supply also generates inflationary process. As inflation is caused by a leftward shift of the aggregate supply, we call it CPI. CPI is usually associated with the non-monetary factors. CPI arises due to the increase in cost of production. Cost of production may rise due to a rise in the cost of raw materials or increase in wages.

Such increases in costs are passed on to consumers by firms by raising the prices of the products. Rising wages lead to rising costs. Rising costs lead to rising prices. And rising prices, again, prompt trade unions to demand higher wages. Thus, an inflationary wage-price spiral starts.

This causes aggregate supply curve to shift leftward. This can be demonstrated graphically (Fig. 11.4) where AS 1 is the initial aggregate supply curve. Below the full employment stage this AS curve is positive sloping and at full employment stage it becomes perfectly inelastic. Intersection point (E 1 ) of AD 1 and AS 1 curves determines the price level.

Now, there is a leftward shift of aggregate supply curve to AS 2 . With no change in aggregate demand, this causes price level to rise to OP 2 and output to fall to OY 2 .

With the reduction in output, employment in the economy declines or unemployment rises. Further shift in the AS curve to AS 2 results in higher price level (OP 3 ) and a lower volume of aggregate output (OY 3 ). Thus, CPI may arise even below the full employment (Y f ) stage.

Causes of CPI :

It is the cost factors that pull the prices upward. One of the important causes of price rise is the rise in price of raw materials. For instance, by an administrative order the government may hike the price of petrol or diesel or freight rate. Firms buy these inputs now at a higher price. This leads to an upward pressure on cost of production.

Not only this, CPI is often imported from outside the economy. Increase in the price of petrol by OPEC compels the government to increase the price of petrol and diesel. These two important raw materials are needed by every sector, especially the transport sector. As a result, transport costs go up resulting in higher general price level.

Again, CPI may be induced by wage-push inflation or profit-push inflation. Trade unions demand higher money wages as a compensation against inflationary price rise. If increase in money wages exceeds labour productivity, aggregate supply will shift upward and leftward. Firms often exercise power by pushing up prices independently of consumer demand to expand their profit margins.

Fiscal policy changes, such as an increase in tax rates leads to an upward pressure in cost of production. For instance, an overall increase in excise tax of mass consumption goods is definitely inflationary. That is why government is then accused of causing inflation.

Finally, production setbacks may result in decreases in output. Natural disaster, exhaustion of natural resources, work stoppages, electric power cuts, etc., may cause aggregate output to decline.

In the midst of this output reduction, artificial scarcity of any goods by traders and hoarders just simply ignite the situation.

Inefficiency, corruption, mismanagement of the economy may also be the other reasons. Thus, inflation is caused by the interplay of various factors. A particular factor cannot be held responsible for inflationary price rise.

Essay on the Effects of Inflation :

People’s desires are inconsistent. When they act as buyers they want prices of goods and services to remain stable but as sellers they expect the prices of goods and services should go up. Such a happy outcome may arise for some individuals; “but, when this happens, others will be getting the worst of both worlds.” Since inflation reduces purchasing power it is bad.

The old people are in the habit of recalling the days when the price of say, meat per kilogram cost just 10 rupees. Today it is Rs. 250 per kilogram. This is true for all other commodities. When they enjoyed a better living standard. Imagine today, how worse we are! But meanwhile, wages and salaries of people have risen to a great height, compared to the ‘good old days’. This goes unusually untold.

When price level goes up, there is both a gainer and a loser. To evaluate the consequence of inflation, one must identify the nature of inflation which may be anticipated and unanticipated. If inflation is anticipated, people can adjust with the new situation and costs of inflation to the society will be smaller.

In reality, people cannot predict accurately future events or people often make mistakes in predicting the course of inflation. In other words, inflation may be unanticipated when people fail to adjust completely. This creates various problems.

One can study the effects of unanticipated inflation under two broad headings:

(i) Effect on distribution of income and wealth

(ii) Effect on economic growth.

(a) Effects of Inflation on Income and Wealth Distribution :

During inflation, usually people experience rise in incomes. But some people gain during inflation at the expense of others. Some individuals gain because their money incomes rise more rapidly than the prices and some lose because prices rise more rapidly than their incomes during inflation. Thus, it redistributes income and wealth.

Though no conclusive evidence can be cited, it can be asserted that following categories of people are affected by inflation differently:

i. Creditors and Debtors:

Borrowers gain and lenders lose during inflation because debts are fixed in rupee terms. When debts are repaid their real value declines by the price level increase and, hence, creditors lose. An individual may be interested in buying a house by taking a loan of Rs. 7 lakh from an institution for 7 years.

The borrower now welcomes inflation since he will have to pay less in real terms than when it was borrowed. Lender, in the process, loses since the rate of interest payable remains unaltered as per agreement. Because of inflation, the borrower is given ‘dear’ rupees, but pays back ‘cheap’ rupees.

However, if in an inflation-ridden economy creditors chronically loose, it is wise not to advance loans or to shut down business. Never does it happen. Rather, the loan- giving institution makes adequate safeguard against the erosion of real value.

ii. Bond and Debenture-Holders:

In an economy, there are some people who live on interest income—they suffer most.

Bondholders earn fixed interest income:

These people suffer a reduction in real income when prices rise. In other words, the value of one’s savings decline if the interest rate falls short of inflation rate. Similarly, beneficiaries from life insurance programmes are also hit badly by inflation since real value of savings deteriorate.

iii. Investors:

People who put their money in shares during inflation are expected to gain since the possibility of earning business profit brightens. Higher profit induces owners of firms to distribute profit among investors or shareholders.

iv. Salaried People and Wage-Earners:

Anyone earning a fixed income is damaged by inflation. Sometimes, unionized worker succeeds in raising wage rates of white-collar workers as a compensation against price rise. But wage rate changes with a long time lag. In other words, wage rate increases always lag behind price increases.

Naturally, inflation results in a reduction in real purchasing power of fixed income earners. On the other hand, people earning flexible incomes may gain during inflation. The nominal incomes of such people outstrip the general price rise. As a result, real incomes of this income group increase.

v. Profit-Earners, Speculators and Black Marketeers:

It is argued that profit-earners gain from inflation. Profit tends to rise during inflation. Seeing inflation, businessmen raise the prices of their products. This results in a bigger profit. Profit margin, however, may not be high when the rate of inflation climbs to a high level.

However, speculators dealing in business in essential commodities usually stand to gain by inflation. Black marketeers are also benefited by inflation.

Thus, there occurs a redistribution of income and wealth. It is said that rich becomes richer and poor becomes poorer during inflation. However, no such hard and fast generalizations can be made. It is clear that someone wins and someone loses from inflation.

These effects of inflation may persist if inflation is unanticipated. However, the redistributive burdens of inflation on income and wealth are most likely to be minimal if inflation is anticipated by the people.

With anticipated inflation, people can build up their strategies to cope with inflation. If the annual rate of inflation in an economy is anticipated correctly people will try to protect them against losses resulting from inflation.

Workers will demand 10 p.c. wage increase if inflation is expected to rise by 10 p.c. Similarly, a percentage of inflation premium will be demanded by creditors from debtors. Business firms will also fix prices of their products in accordance with the anticipated price rise. Now if the entire society “learns to live with inflation” , the redistributive effect of inflation will be minimal.

However, it is difficult to anticipate properly every episode of inflation. Further, even if it is anticipated it cannot be perfect. In addition, adjustment with the new expected inflationary conditions may not be possible for all categories of people. Thus, adverse redistributive effects are likely to occur.

Finally, anticipated inflation may also be costly to the society. If people’s expectation regarding future price rise become stronger they will hold less liquid money. Mere holding of cash balances during inflation is unwise since its real value declines. That is why people use their money balances in buying real estate, gold, jewellery, etc.

Such investment is referred to as unproductive investment. Thus, during inflation of anticipated variety, there occurs a diversion of resources from priority to non-priority or unproductive sectors.

b. Effect on Production and Economic Growth :

Inflation may or may not result in higher output. Below the full employment stage, inflation has a favourable effect on production. In general, profit is a rising function of the price level. An inflationary situation gives an incentive to businessmen to raise prices of their products so as to earn higher doses of profit.

Rising price and rising profit encourage firms to make larger investments. As a result, the multiplier effect of investment will come into operation resulting in higher national output. However, such a favourable effect of inflation will be temporary if wages and production costs rise very rapidly.

Further, inflationary situation may be associated with the fall in output, particularly if inflation is of the cost-push variety. Thus, there is no strict relationship between prices and output. An increase in aggregate demand will increase both prices and output, but a supply shock will raise prices and lower output.

Inflation may also lower down further production levels. It is commonly assumed that if inflationary tendencies nurtured by experienced inflation persist in future, people will now save less and consume more. Rising saving propensities will result in lower further outputs.

One may also argue that inflation creates an air of uncertainty in the minds of business community, particularly when the rate of inflation fluctuates. In the midst of rising inflationary trend, firms cannot accurately estimate their costs and revenues. Under the circumstance, business firms may be deterred in investing. This will adversely affect the growth performance of the economy.

However, slight dose of inflation is necessary for economic growth. Mild inflation has an encouraging effect on national output. But it is difficult to make the price rise of a creeping variety. High rate of inflation acts as a disincentive to long run economic growth. The way the hyperinflation affects economic growth is summed up here.

We know that hyperinflation discourages savings. A fall in savings means a lower rate of capital formation. A low rate of capital formation hinders economic growth. Further, during excessive price rise, there occurs an increase in unproductive investment in real estate, gold, jewellery, etc.

Above all, speculative businesses flourish during inflation resulting in artificial scarcities and, hence, further rise in prices. Again, following hyperinflation, export earnings decline resulting in a wide imbalance in the balance of payments account.

Often, galloping inflation results in a ‘flight’ of capital to foreign countries since people lose confidence and faith over the monetary arrangements of the country, thereby resulting in a scarcity of resources. Finally, real value of tax revenue also declines under the impact of hyperinflation. Government then experiences a shortfall in investible resources.

Thus, economists and policy makers are unanimous regarding the dangers of high price rise. But the consequence of hyperinflation is disastrous. In the past, some of the world economies (e.g., Germany after the First World War (1914-1918), Latin American countries in the 1980s) had been greatly ravaged by hyperinflation.

The German Inflation of 1920s was also Catastrophic:

During 1922, the German price level went up 5,470 per cent, in 1923, the situation worsened; the German price level rose 1,300,000,000 times. By October of 1923, the postage of the lightest letter sent from Germany to the United States was 200,000 marks.

Butter cost 1.5 million marks per pound, meat 2 million marks, a loaf of bread 200,000 marks, and an egg 60,000 marks Prices increased so rapidly that waiters changed the prices on the menu several times during the course of a lunch!! Sometimes, customers had to pay double the price listed on the menu when they observed it first!!!

During October 2008, Zimbabwe, under the President-ship of Robert G. Mugabe, experienced 231,000,000 p.c. (2.31 million p.c.) as against 1.2 million p.c. price rise in September 2008—a record after 1923. It is an unbelievable rate. In May 2008, the cost of price of a toilet paper itself and not the costs of the roll of the toilet paper came to 417 Zimbabwean dollars.

Anyway, people are harassed ultimately by the high rate of inflation. That is why it is said that ‘inflation is our public enemy number one’. Rising inflation rate is a sign of failure on the part of the government.

Essay on the Causes of Inflation (473 Words)
Cost-Push Inflation and Demand-Pull or Mixed Inflation
Demand Pull Inflation and Cost Push Inflation | Money
Essay on Inflation: Meaning, Measurement and Causes

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Permitted Use

Teaching About Money, Spending, and Inflation Using a Classroom Inflation Auction

Students participate in two auctions: The goods in each auction are identical, but the amount of money given to students increases from the first to the second auction. Students learn that if spending grows at a faster rate than the economy’s ability to produce goods and services, inflation will result. This is inflation caused by “too much spending chasing too few goods.”

Lesson Author: Scott Wolla, Ph.D., Federal Reserve Bank of St. Louis

Ages: 12 to adult

Compelling Question: How are the money supply and inflation related?

Time Required: 20 minutes

Standards ( see below )

Students will

define money and inflation and
describe the relationship between the money, spending, and inflation.
“Teaching About Money and Inflation Using a Classroom Inflation Auction” PowerPoint slides ( download the slides )
Handout 1: Funny Money, enough copies cut apart so that each student will receive approximately 12 bills each, keeping in mind that some students will receive more bills than others ( download the handout )
Enough beans so that students will receive approximately 12 beans each, keeping in mind that some students will receive more beans than others
Two sets of three identical items for two auction rounds; items should be of interest to students, for example, a candy bar, homework pass, and hall pass

Preparation

Divide the Funny Money (or beans) so that approximately one-third is available for auction Round 1 and two-thirds is available for auction Round 2.

Part 1: What Is money and its relationship to spending?

Display Slide 2. Introduce the activity by asking the students, “What is money?” ( Answers will vary .)
Display Slide 3. Explain that money is anything widely accepted in exchange for goods and services. More precisely, U.S. currency is fiat money, which means it has no intrinsic value (no value of its own) or representational value (not representing anything of value, such as gold).
Why are you happy when you get U.S. dollars in a birthday card? ( U.S. dollars can buy goods and services. )
Why do employees work to receive U.S. dollars? ( Answers will vary but will likely include that people work for money so that they can spend it to buy the goods and services they want .)
Why do businesses accept U.S. dollars in exchange for other goods or services? ( Businesses accept U.S. dollars so that they can pay employees and buy other goods and services. )
How would your spending likely change if you had more money? ( They would likely spend more money. )
In general, is spending good for the economy? ( Yes, more spending can lead to more production of goods and services. More production can lead to more jobs and income for people. This chain of events results in an expanding economy. )
If more money results in more spending, and more spending can cause economic growth, why shouldn’t the government continuously add money to the economy? ( Answers will vary. )

Part 2: Inflation Auction

Distribute the Funny Money (or beans) to students in a random fashion. Attempt to make sure that the amount of money students receive is varied (2 to 6 bills [or beans] each) to ensure that someone wins the auction rather than it ending in a tie.
Three items will be auctioned (by the teacher).
The highest bidder will win each item.
The three items represent the total output of goods and services produced in the classroom economy.
Each Funny Money bill (or bean) is worth $1.
You may not combine your money with anyone else’s in the room.
Invite the students to bid, sell each item to the highest bidder, and note the final selling price of each item. Collect the Funny Money (or beans) from each winner as part of the transaction.
Display Slide 5. Record the price of each item sold and calculate the total.
You will distribute additional money.
You will auction three items identical to the ones from Round 1.
If anyone has money left over from Round 1, he or she may use that money in this round. The “new” money is equal in value to the old money.
Distribute in random amounts approximately double the amount of money distributed in Round 1 (perhaps 6 to 12 bills [or beans] each). Conduct the auction as before. NOTE: Prices should be considerably higher in Round 2. If students are not bidding high prices, encourage more bidding by reminding students that this is the final auction round and that their money cannot be used to buy goods and services outside the classroom.
What happened to prices in Round 2 compared with those in Round 1? ( Prices were higher in Round 2. )
Were the goods in the auctions different in any way? ( No, they were exactly the same. )
Were there any more items available to buy in Round 2 than in Round 1? ( No, the number of items was the same in both auctions. )
Why were prices higher in Round 2? ( People had more money in Round 2, so they were able to bid higher amounts for the identical items than they could in Round 1. )
Assuming the quantity of goods and services remains constant, how would you summarize the relationship between spending and prices? ( The level of spending and the prices of goods and services are directly related. )
Inflation is a general, sustained upward movement of prices for goods and services in an economy.
Inflation is an increase in the average level of prices in the economy, not the individual prices of a few goods. For example, while the prices of gasoline and movie tickets might increase, the prices of computers and baseball tickets might decrease.
You might hear economists say inflation occurs when “too much money is chasing too few goods.” This is likely to occur when the spending increases at a faster rate than the supply of goods and services produced in the economy.
Money is important because it provides the opportunity to spend, but ultimately it is the spending that drives economic activity, and potentially, inflation.
What is money? ( Anything widely accepted in exchange for goods and services. )
Why is money useful? ( People spend money to purchase goods and services. Money facilities spending. )
What is inflation? ( Inflation is a general, sustained upward movement of prices for goods and services in an economy. )
What is the relationship between spending and inflation? ( Inflation is caused when spending increases at a faster rate than the supply of goods and services produced in the economy. )

Standards and Benchmarks

Voluntary National Content Standards in Economics 1

Standard 11: Money and Inflation. Money makes it easier to trade, borrow, save, invest, and compare the value of goods and services. The amount of money in the economy affects the overall price level. Inflation is an increase in the overall price level that reduces the value of money.

Benchmark 4, Grade 8: Inflation reduces the value of money.
Benchmark 5, Grade 12: In the long run, inflation results from increases in a nation’s money supply that exceed increases in its output of goods and services.

Teaching the Linkage Between Banks and the Fed: R.I.P. Money Multiplier ( Page One Economics ® )

1 Note: The most recent version (2010) of the Voluntary National Content Standards does not reflect the current relationship between money, spending, and inflation.

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Gr.12 Economics Lesson Plan T3 W2: Inflation

Grade 12 Economics Lesson Plan Term 3 Week 2: Inflation

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Home — Essay Samples — Economics — Political Economy — Inflation

Essays on Inflation

Inflation essay topics and outline examples, essay title 1: understanding inflation: causes, effects, and economic policy responses.

Thesis Statement: This essay provides a comprehensive analysis of inflation, exploring its root causes, the economic and societal effects it generates, and the various policy measures employed by governments and central banks to manage and mitigate inflationary pressures.

Introduction
Defining Inflation: Concept and Measurement
Causes of Inflation: Demand-Pull, Cost-Push, and Monetary Factors
Effects of Inflation on Individuals, Businesses, and the Economy
Inflationary Policies: Central Bank Actions and Government Interventions
Case Studies: Historical Inflationary Periods and Their Consequences
Challenges in Inflation Management: Balancing Growth and Price Stability

Essay Title 2: Inflation and Its Impact on Consumer Purchasing Power: A Closer Look at the Cost of Living

Thesis Statement: This essay focuses on the effects of inflation on consumer purchasing power, analyzing how rising prices affect the cost of living, household budgets, and the strategies individuals employ to cope with inflation-induced challenges.

Inflation's Impact on Prices: Understanding the Cost of Living Index
Consumer Behavior and Inflation: Adjustments in Spending Patterns
Income Inequality and Inflation: Examining Disparities in Financial Resilience
Financial Planning Strategies: Savings, Investments, and Inflation Hedges
Government Interventions: Indexation, Wage Controls, and Social Programs
The Global Perspective: Inflation in Different Economies and Regions

Essay Title 3: Hyperinflation and Economic Crises: Case Studies and Lessons from History

Thesis Statement: This essay explores hyperinflation as an extreme form of inflation, examines historical case studies of hyperinflationary crises, and draws lessons on the devastating economic and social consequences that result from unchecked inflationary pressures.

Defining Hyperinflation: Thresholds and Characteristics
Case Study 1: Weimar Republic (Germany) and the Hyperinflation of 1923
Case Study 2: Zimbabwe's Hyperinflationary Collapse in the Late 2000s
Impact on Society: Currency Devaluation, Poverty, and Social Unrest
Responses and Recovery: Stabilizing Currencies and Rebuilding Economies
Preventative Measures: Policies to Avoid Hyperinflationary Crises

Inflation Reduction Act in The Frame of Macroeconomic Challenges

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Essay on Inflation

Students are often asked to write an essay on Inflation in their schools and colleges. And if you’re also looking for the same, we have created 100-word, 250-word, and 500-word essays on the topic.

Let’s take a look…

100 Words Essay on Inflation

Understanding inflation.

Inflation is when prices of goods and services rise over time. This means you need more money to buy the same things. It’s like a slow-motion robbery!

Causes of Inflation

Inflation is often due to increased production costs or increased demand for goods and services. When people want more of something, and it’s scarce, prices go up.

Impact of Inflation

Inflation affects everyone. If your income doesn’t increase as fast as inflation, you’ll have less buying power. But, if you’re a business owner, you might be able to raise prices and make more money.

Controlling Inflation

Governments try to control inflation by adjusting interest rates, taxes, and government spending. It’s a tricky balancing act to keep inflation low but not too low.

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Paragraph on Inflation

250 Words Essay on Inflation

Inflation, a crucial economic concept, refers to the rate at which the general level of prices for goods and services is rising, subsequently eroding purchasing power. It’s an indicator of the economic health of a nation, with moderate inflation signifying a growing economy.

The Causes of Inflation

Inflation generally occurs due to two primary factors: demand-pull and cost-push inflation. Demand-pull inflation transpires when demand for goods and services surpasses their supply. On the other hand, cost-push inflation arises when the costs of production escalate, causing producers to increase prices to maintain profit margins.

Effects of Inflation

Inflation impacts various aspects of the economy. It erodes the purchasing power of money, causing consumers to spend more for the same goods or services. Inflation can also create uncertainty in the economy, affecting investment and saving decisions. However, moderate inflation can stimulate spending and investment, driving economic growth.

Managing Inflation

Central banks attempt to control inflation through monetary policy. By adjusting interest rates, they influence the level of spending and investment in the economy. Higher interest rates typically reduce spending, curbing inflation. Conversely, lower interest rates stimulate spending, potentially leading to inflation.

Inflation is a complex and multifaceted subject. Understanding its causes, effects, and the measures to control it is essential for both macroeconomic stability and individual financial well-being. As future leaders, it’s crucial for us as students to grasp these concepts to make informed decisions in our professional and personal lives.

500 Words Essay on Inflation

Introduction to inflation.

Inflation is a complex economic phenomenon that affects every aspect of our lives, from the cost of living to the value of money. It is defined as the rate at which the general level of prices for goods and services is rising, subsequently, purchasing power is falling. Central banks attempt to limit inflation, and avoid deflation, in order to keep the economy running smoothly.

Inflation is primarily caused by an increase in the money supply that outpaces economic growth. Ever since the end of the gold standard, governments have had the ability to create money at will. If a nation’s money supply grows too rapidly compared to its production of goods and services, prices will increase, leading to inflation.

Additionally, inflation can be spurred by demand-pull conditions, where demand for goods and services exceeds their supply. Cost-push inflation, on the other hand, occurs when the costs of production increase, causing producers to raise prices to maintain their profit margins.

Impacts of Inflation

Inflation affects economies in various ways. While mild inflation is viewed as a sign of a healthy economy, hyperinflation can lead to economic instability. It erodes purchasing power as the same amount of money can buy fewer goods and services. This can lead to uncertainty and a decrease in spending and investment, which can slow economic growth.

Moreover, inflation can harm savers if the inflation rate surpasses the interest rate on their savings. It also favors borrowers, as the real value of their debt diminishes over time. This redistribution of wealth from savers to borrowers can lead to social and economic inequalities.

Central banks use monetary policy to control inflation. They adjust the money supply by setting interest rates and through open market operations. By raising interest rates, central banks can decrease the money supply, making borrowing more expensive and slowing economic activity, thereby reducing inflation.

Furthermore, governments can use fiscal policy to control inflation. This involves changing tax rates and levels of government spending to influence the level of demand in the economy. By reducing demand, governments can put downward pressure on prices and reduce inflation.

Inflation is an intricate part of our economic systems. It is a double-edged sword that can stimulate economic growth when mild, but can also lead to economic instability when it becomes too high. Understanding inflation is crucial for policymakers, investors, and consumers alike as it influences our decisions and shapes our economic reality. By effectively managing inflation, governments can promote economic stability and growth, thereby improving the standard of living for their citizens.

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Rick Hess Straight Up

Education policy maven Rick Hess of the American Enterprise Institute think tank offers straight talk on matters of policy, politics, research, and reform. Read more from this blog.

Grade Inflation Teaches Students We Don’t Mean What We Say

When I’m working with school leaders, we usually wind up spending a lot of time on the fact that “talk is cheap.” A principal can tell teachers how much she values their time, but if she starts staff meetings late or swamps them with trivial tasks, they won’t believe a word of it. Similarly, most adults who work in and around schools say they believe in excellence, responsibility, and rigor. And yet we’re sending a very different signal to students.

This fall, ACT released a new study tracking high school grades over the past decade—finding a dramatic bout of grade inflation, even as the National Assessment of Educational Progress showed steady declines in academic performance. The results should raise hard questions for those concerned about instructional rigor, sky-high graduation rates, and whether lenient grading policies adopted in the name of equity and student well-being deserve a closer look.

At this point, the evidence of grade inflation is incontrovertible. Between 2010 and 2022, student GPAs climbed markedly. According to the ACT study, the average adjusted GPA increased from 3.17 to 3.39 in English and from 3.02 to 3.32 in math. In 2022, more than 89 percent of high schoolers received an A or a B in math, English, social studies, and science. Moreover, the 2019 NAEP High School Transcript Study found that students were getting better grades than those a decade earlier but were learning less. In Los Angeles, the nation’s second largest school district, 83 percent of 6 th graders received A, B, or C grades in spring 2022—even though just 27 percent met or exceeded the standards on state and national assessments.

Grade inflation isn’t a new phenomenon in American schooling. In 2009, Mark Schneider, now the director of the Institute of Education Sciences, found that, even as the share of students finishing Algebra 2 grew by a third between 1978 and 2000 and math GPAs rose, assessed high school math performance actually fell between 1978 and 2008.

Increasingly impressive transcripts and rising grades have yielded less actual student learning. How can that be? It’s because course titles and grades are cheap. What matters is not the grades students get or the labels of the courses they take but what is actually taught. And here is where it has been far too easy to slouch into Horace’s Compromise , famously described by Ted Sizer: “The agreement between teacher and students to exhibit a façade of orderly purposefulness is a conspiracy for the least, the least hassle for anyone.”

Just the other week, in an essay that offered a damning portrayal of the student-level consequences of easy grading and missing rigor, Teach Like a Champion author Doug Lemov offered a related observation: “A sort of tacit collusion emerges: when almost everyone gets what they want, the school becomes easier to run. Teachers are happy because no one calls them to argue about grades, and kids aren’t competitive and pushy.”

Harvey Mansfield, the iconic Harvard political philosopher, has traced the roots of grade inflation to social and cultural shifts that started in the late 1960s. (Decades ago, Mansfield became known for his practice of giving students two sets of grades: one that reflected Mansfield’s own assessment of the students’ performance and another “based on the system of Harvard’s inflated grades.”)

Today, polling has found that 44 percent of educators say that students today often ask for better grades than they’ve earned. Four out of 5 educators say they’ve given into the demands of pushy students or helicopter parents, partly because so many report having been harassed by students and parents over grades.

The insidious thing is how easy grade inflation is for everyone involved. Meanwhile, advocates with loud voices have sought to make all of this newly respectable, using the fashionable language of “ equitable grading ” to push schools to eliminate zeroes, end graded homework, drop penalties for late work and missed assignments, and offer endless retests. The upshot is to teach students that deadlines are optional and consequences aren’t real.

For teachers squeezed between helicopter parents and anti-grading ideologues, it can be tough to hold the line on high expectations. Educational leaders need to stand up for rigor, and they need to support classroom teachers who are committed to putting that into practice. And this means there’s an important role for states when it comes to providing honest assessments on student learning and ensuring that graduates have mastered essential knowledge and skills.

After all, there are real, unfortunate consequences to giving nearly every student an A or a B. Such grades tell students it’s OK to coast, give parents a false sense of how their kids are doing, and allow students to graduate without essential knowledge or skills. Worst of all, it teaches students that we don’t mean our big talk about hard work and excellence. That lesson’s not good for anyone.

The opinions expressed in Rick Hess Straight Up are strictly those of the author(s) and do not reflect the opinions or endorsement of Editorial Projects in Education, or any of its publications.

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Essay on Inflation in Pakistan for Students

by Pakiology | Mar 22, 2024 | Essay | 0 comments

In this essay on inflation in Pakistan, we will look at the causes, effects, and solutions to this issue that has been affecting the country for decades. The term ‘inflation’ refers to a sustained rise in the prices of goods and services in an economy. In Pakistan, inflation has been a major concern since the late 1990s, with the Consumer Price Index (CPI) reaching a peak in 2023. We will explore the various factors that have contributed to inflation in Pakistan, its economic effects, and what can be done to address the issue.

Page Contents

Essay on Inflation Outlines

Causes of inflation in pakistan, effects of inflation, solution to control inflation.

Introduction

Inflation in Pakistan is caused by several factors, which can be divided into two main categories: domestic and external. The main domestic causes of inflation are an increase in money supply, an increase in government spending, an increase in indirect taxes, and a decrease in economic growth.

The most significant contributor to inflation in Pakistan is an increase in the money supply. When there is too much money chasing after too few goods, prices rise, creating a situation known as demand-pull inflation. An increase in the money supply can be caused by the central bank printing more money or by the government borrowing more money from the public.

In addition, higher government spending can lead to inflation. This occurs when the government prints more money to finance its expenditure or borrows from the public and transfers the cost of this additional spending to businesses and consumers. This leads to higher prices for goods and services. Indirect taxes are another major factor that contributes to inflation in Pakistan. When indirect taxes are increased, prices of goods and services also increase, leading to an overall rise in prices.

Finally, low economic growth can also cause inflation in Pakistan. A weak economy reduces people’s purchasing power, forcing them to buy less, which reduces demand and leads to lower prices. However, when economic growth stalls, businesses are unable to sell their products at the same price as before, leading to a rise in prices.

Overall, inflation in Pakistan is caused by a combination of domestic and external factors. These include an increase in money supply, higher government spending, increases in indirect taxes, and a decrease in economic growth.

The effects of inflation on the economy can be both positive and negative. Inflation erodes the purchasing power of money, meaning that each unit of currency is worth less than it was before. This means that, as the cost of living increases, people can purchase fewer goods and services for the same amount of money. As a result, their standard of living decreases.

Inflation also reduces the real return on investments and savings, which can have a detrimental effect on economic growth. When inflation is high, people prefer to save their money rather than invest in a business or other activities. This reduces the availability of capital and results in slower economic growth.

In addition to decreasing standards of living, inflation can lead to unemployment if companies are not able to increase wages at the same rate as prices rise. This can lead to an increase in poverty, as people struggle to afford necessities. Furthermore, when prices rise faster than wages, it puts pressure on government budgets and can increase public debt.

Inflation can also cause the value of the local currency to depreciate against foreign currencies. This has a direct impact on the cost of imports and makes domestic goods less competitive in international markets. It can also have an indirect impact on exports, as it reduces the competitiveness of local producers in foreign markets.

Inflation is a serious issue in Pakistan, and it needs to be addressed to improve the country’s economic conditions. The following are some of the measures that can be taken to control inflation in Pakistan:

1. Fiscal policy: A strong fiscal policy is necessary for controlling inflation. The government should increase its revenue by implementing taxes on the wealthy and reducing public spending. This will help reduce budget deficits, which will result in lower inflation.

2. Monetary policy: The State Bank of Pakistan should adopt a tighter monetary policy to control inflation. It should raise interest rates so that investors have an incentive to save rather than spend, thus curbing demand-pull inflation.

3. Supply-side measures: There should be an increase in the production of essential commodities and products to meet the demand of consumers. This will help reduce prices and inflation in the long run.

4. Subsidies: The government should provide subsidies to those who are suffering due to the high prices of essential items. This will help them cope with the rising cost of living and ensure that they have access to essential goods and services.

5. Stabilizing exchange rate: A stable exchange rate between foreign currencies and the rupee is necessary for controlling inflation. The State Bank of Pakistan should strive to keep the rupee’s value stable by using currency swaps and other methods.

These measures can go a long way in controlling inflation in Pakistan. By taking these measures, the government can help improve the country’s economic condition and create an environment conducive to investment and growth.

What is inflation in simple words?

Inflation is a sustained increase in the general price level of goods and services in an economy over a period of time.

What are the 4 main causes of inflation?

The 4 main causes of inflation are: Demand-pull inflation: when there is an increase in demand for goods and services that outstrip the economy’s ability to produce them. Cost-push inflation: when the cost of production increases, causing companies to raise prices to maintain their profit margins. Built-in inflation: when businesses expect prices to rise and build that expectation into their prices, causing a self-fulfilling cycle of inflation. Imported inflation: when the cost of imported goods increases, leading to higher prices for consumers.

What are the 5 main causes of inflation?

The 4 main causes of inflation are: 1. Demand-pull inflation 2. Cost-push inflation 3. Built-in inflation 4. Imported inflation 5. Monetary inflation

What is inflation introduction?

Inflation is a phenomenon that has been observed throughout history. It refers to the sustained increase in the general price level of goods and services in an economy over a period of time.

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An essential morning newsletter briefing for leaders in the nation’s capital.

A GOP congressman’s case for helping Ukraine

with research by Tyler Pager and Tobi Raji

Good morning, Early Birds. We’ve seen a lot of things on the D.C. Metro. Maybe one day we’ll see a horse . Have a great weekend. Tips: [email protected] . Was this forwarded to you? Sign up here . Thanks for waking up with us.

In today’s edition … Who Trump is considering for his next vice president … Johnson will appear with Trump at Mar-a-Lago to discuss “election integrity” … but first …

On the Hill

Why a freshman republican congressman is urging johnson to help ukraine.

Seven questions for … Rep. Chuck Edwards (R-N.C.): We sat down with Edwards, who recently returned from a trip to Ukraine, Moldova and Poland with Sen. Joni Ernst (R-Iowa) and Reps. Tom Suozzi (D-N.Y.), Ashley Hinson (R-Iowa), Mike Quigley (D-Ill.) and Wiley Nickel (D-N.C.). The lawmakers met with President Volodymyr Zelensky ; other Ukrainian officials and Bridget Brink , the U.S. ambassador to Ukraine.

We discussed why Edwards — a freshman who defeated Rep. Madison Cawthorn in the Republican primary in 2022 — doesn’t think it’s a good idea to attach border provisions to a Ukraine aid bill, why he thinks House Speaker Mike Johnson (R-La.) will put a bill on the floor even if it costs him his speakership and what he wants his Republican colleagues who oppose Ukraine aid to understand.

This interview has been edited and condensed for length and clarity.

The Early: What did you tell Zelensky about the path forward for the Ukraine aid package?

Edwards: I didn’t tell him so much as my goal was to learn from him. I did express that I and the rest of the delegation was there because we had a great interest in what was taking place in Ukraine, and we get a lot of conflicting information here in the United States. The media doesn't cover what's taking place in Ukraine nearly as much as it does other places.

An example is one particular night — I believe it was after meeting with Zelensky — I got back to my hotel, I pulled up my phone, and I’m going through my normal news feed. Of the top 20 stories, 11 were about Israel and Gaza and there was one about Ukraine. The world seems to have lost interest in what's taking place over there. But the situation is very dire.

The Early: Is the anything in particular you’ve heard conflicting reports about that your trip cleared up?

Edwards: I wouldn't say conflicting, but I certainly developed a new sense of urgency for what's taking place over there. Here's the most powerful statement that I heard on the trip: I was standing in the basement — a dark, dank, moldy, smelly basement, not much bigger than the size of this room — and listening to accounts of survivors of having been locked up in that basement for 27 days. People were dying in that room. I stood in the corner where they piled the bodies as people died. They piled nine bodies in that corner in those 27 days.

They told a story where there was a young boy, seven years old, that was dying. And they went upstairs to the door, pounded on it and explained to Russian soldiers that they had a seven-year-old child that was dying. And the response was: “Let him die. This is war.” That’s a cruelty that I don’t believe that anybody in this country is aware of that's taking place.

The Early: What do you see as the path forward now toward sending more aid to Ukraine?

Edwards: I am speaking with our speaker and urging him to get a bill on the floor.

I also learned that there are probably some ways that we can help Ukraine in a fiscally responsible manner rather than just our taxpayers carte blanche paying for the aid. I like the lease-loan program. There’s a great deal of conversation around the advantages of the United States seizing Russian assets and paying for the aid in that manner.

The Early: Some House Republicans have called for adding border security measures to any sort of Ukraine aid bill. What’s your take?

Edwards: I believe that while Americans are unbelievably frustrated with the Biden administration — that he’s not given our border security the attention that it deserves — we need to treat those as two different issues. I think the best path is for us to continue to put pressure on the White House to take action using the powers that they already have.

The Early: How soon do you think Johnson needs to put a Ukraine bill on the floor?

Edwards: Preferably it would be today. I would certainly hope that we can open up a conversation and get something on the floor next week to help Ukraine. They’re running out of ammunition. They have brigades that have no equipment. They're being fired upon 10 times for every one shell that they can return. The situation is getting dire.

The Early: Do you think bringing such a bill to the floor would lead some of your Republican colleagues to trigger a vote to try to oust Johnson?

Edwards: I can’t predict what any of them will do. But I also know Speaker Johnson, and I don't think that's his overriding concern. I think he will stand to do the right thing, no matter what the consequences might be to him personally.

[Ed.: House Minority Leader Hakeem Jeffries (D-N.Y.) told reporters yesterday that he thought “there are a reasonable number of Democrats who would not want to see the speaker fall” if Republicans seek to remove Johnson for bringing a Ukraine bill to the floor.]

The Early: Many House Republicans are against sending more aid to Ukraine. What is your message to those colleagues after your trip?

Edwards: To recognize that the United States has always stood for freedom, liberty and democracy --- and that is very much at risk at this moment.

Ukraine will have one of two types of governments: It will have a democracy or it will fall and crumble to a Marxist-Soviet murderous dictator. My message is that the world is watching, and America has the opportunity at this moment to define how much we believe in a democratic society.

House to try yet again on FISA

House Republicans will try for a fourth time today to pass extensions to the Foreign Intelligence Surveillance Act after making yet more changes to accommodate the far-right faction of the Republican conference.

The compromise extends a warrantless surveillance program of foreign nationals for two years instead of five, in hopes that former president Donald Trump is reelected and can implement additional changes. The compromise will also allow a vote on an amendment to require warrants for when U.S. citizens are caught up in the surveillance program in Section 702.

Trump came out against the bill before 19 Republicans voted against the rule earlier this week. House Majority Leader Steve Scalise (R-La.) told reporters that conversations have been ongoing with the president about the new version.

Conservative political group Heritage Action will score the vote on the amendment requiring a warrant on U.S. citizens as part of Section 702, urging lawmakers to vote for it. The vote will be used as a part of its policy scorecard that determines how conservative a lawmaker is.

“If Congress reauthorizes Section 702 without strong reforms, lawmakers will have missed a massive opportunity to end some of the federal government’s glaring abuse,” Heritage Action executive vice president Ryan Walker said.

What we're watching

At mar-a-lago.

Speaker Johnson will appear with Trump at Mar-a-Lago this afternoon to discuss “election integrity.” But the meeting comes as Johnson's speakership is under threat from Rep. Marjorie Taylor Greene (R-Ga.) and as Trump continues to make Johnson's life more difficult by inserting himself in internal policy disputes.

We're watching to see if Trump rallies to Johnson's defense.

On the campaign trail

Vice President Harris will give a campaign speech on abortion today in Tucson, three days after the Arizona Supreme Court ruled that an 1864 law forbidding almost all abortions in the swing state. She’ll be joined by Democratic Rep. Ruben Gallego , who’s running for the state’s open Senate seat; Mini Timmaraju of the advocacy group Reproductive Freedom for All ; and an array of state and local officials.

“Here’s what a second Trump term looks like: more bans, more suffering, less freedom,” Harris is expected to say. “But we are not going to let that happen.”

White House Notebook

Democrats hope 2024 election will be about abortion.

White House reporter Tyler Pager files this week’s White House Notebook:

“It’s the economy, stupid.”

The phrase, coined by James Carville , at the time a top strategist on Bill Clinton ’s successful 1992 presidential campaign, has long been a guiding principle for Democratic and Republican candidates. The idea is that when voters head to the ballot box, they will vote with their wallets.

This cycle, the Biden campaign believes it has a strong economic case to make to voters, specifically pointing to booming job growth and a low unemployment rate. But persistent inflation continues to bedevil Biden and his party, as they have struggled to explain to Americans why prices keep rising.

So as Biden continues to grapple with an unpredictable post-pandemic economic recovery, Democrats are increasingly hopeful that Carville’s edict may not hold true in November. Instead, they hope the 2024 version of Carville’s slogan will be: “It’s abortion, stupid.” And this last week showed precisely why.

On Monday, former president Donald Trump said abortion policy should be left to the states. The next day, Arizona’s conservative Supreme Court revived a near-total ban on abortion, leading to outcry from both Democrats and some Republicans. Trump himself even criticized the ruling.

After the Supreme Court overturned Roe v. Wade , Democrats found electoral success on the issue in the 2022 midterms and in last year’s Kentucky governor’s race. As states around the country have further restricted abortion access since the high court decision, Democrats are hoping the issue remains potent for voters in November.

But whether it outranks the economy remains unclear. A recent survey from Pew Research Center found that nearly three-quarters of Americans say strengthening the economy should be a top priority for Biden and Congress — outpacing any other issue.

The latest bad news for Biden on the economic front came from the Bureau of Labor Statistics on Wednesday when they reported prices rose 3.5 percent from March 2023 to March 2024, which is up slightly from the 3.2 percent annual figure in February.

Biden tried to project an optimistic outlook after the inflation report, but it did little to tamp down on anxiety within the Democratic Party.

“We’re in a situation where we’re better situated than we were when we took office where we — inflation was skyrocketing,” Biden said Wednesday during a joint news conference with Japanese Prime Minister Fumio Kishida . “And we have a plan to deal with it, whereas the opposition — my opposition talks about two things. They just want to cut taxes for the wealthy and raise taxes on other people.”

He added: “They have no plan. Our plan is one I think is still sustainable.”

Follow all of Tyler’s reporting here and give him a follow on X here .

The campaign

What donald trump wants in his next vice president — and who he’s considering.

Our colleagues Marianne LeVine, Josh Dawsey and Ashley Parker answer the question on everyone’s mind this election cycle: Who will Donald Trump pick to be his running mate?

Here’s what you need to know about the search for his ideal vice president:

The qualities: “Trump’s perfect vice president looks the part: attractive and telegenic. They are ideally Black or a woman, though that’s not required. And they are most certainly not taller than Trump himself,” our colleagues write.

“Trump wants someone he sees in person but doesn’t see too much, his advisers say. He does not necessarily want a successor as the leader of the MAGA movement; he would prefer that the Republican Party duke it out for his endorsement in four years, one adviser said. He wants a No. 2 who has won in the past. And he wants someone who will never contradict his false claims about the outcome of the 2020 election .”
“But more than anything, he wants someone who can help him win.”

The candidates: “Who is in and out depends on the day. Trump has fixated in some conversations on J.D. Vance , four people close to the campaign say. Trump’s allies have also discussed Republican Govs. Doug Burgum of North Dakota, Kristi L. Noem of South Dakota and Sarah Huckabee Sanders of Arkansas; Sens. Katie Boyd Britt (R-Ala.), Bill Hagerty (R-Tenn.) — who several allies have been quick to note ‘looks the part’ — Marco Rubio (R-Fla.) and Tim Scott (R-S.C.); Reps. Byron Donalds (R-Fla.) and Elise Stefanik (R-N.Y.); and Kari Lake , a MAGA star who lost Arizona’s gubernatorial race in 2022. Trump has even floated Robert F. Kennedy Jr. ’s name to guests on the patio at Mar-a-Lago, although his advisers decry that idea.”

“He may still pick a political newcomer — perhaps someone from the business world. He certainly won’t pick Mike Pence. ”

From The Post:

The horse wars of Stormy Daniels. By Peter Jamison .
GOP Senate candidate in Montana builds campaign on once-secret Navy exploits. By Isaac Stanley-Becker, Beth Reinhard and Liz Goodwin .
Biden administration cancels another $7.4 billion in student loans. By Danielle Douglas-Gabriel .
Leo rejects Senate subpoena from panel probing gifts to Supreme Court justices . By Tobi Raji .
Pentagon frustrated by lack of notice from Israel in Syria strike . By Missy Ryan and Dan Lamothe .
Who is Juan Merchan, the judge in Trump’s N.Y. hush money trial? By Perry Stein and Shayna Jacobs .
First Person Essay: Francis Collins: Why I’m going public with my prostate cancer diagnosis. By former NIH director Francis S. Collins .

From across the web:

Kari Lake is scrambling to call Arizona lawmakers after abortion ban ruling . By Politico’s Ally Mutnick and Megan Messerly .
Iranian attack expected on Israel in next two days . By the Wall Street Journal’s Dov Lieber, Benoit Faucon and Warren P. Strobel .
U.S. and Russia pursue secret prisoner swap talks, Russian diplomat says . By the Wall Street Journal’s Ann M. Simmons .

Back in the day when print mattered, @washingtonpost ran a rare "EXTRA" edition when OJ was acquitted. No one knew at the time, but it would be the Post's last-ever extra edition. pic.twitter.com/hOLHJZXxFN — Chuck Thies (@ChuckThies) April 11, 2024

Thanks for reading. You can also follow us on X: @theodoricmeyer and @LACaldwellDC .

ECONOMIC GROWTH AND DEVELOPMENT GRADE 12 NOTES - ECONOMICS STUDY GUIDES

Key concepts
Economic growth and economic development
Demand-side approach
The supply-side approach
Evaluation of the South African approaches used in South Africa
The North/South divide

9.1 Key concepts

These definitions will help you understand the meaning of key Economics concepts that are used in this study guide. Understand these concepts well.

Use mobile notes to help you learn these key concepts. See page xiv in the introduction for more. Learn the difference between growth and development initiatives.

9.2 Economic growth and economic development

The difference between economic growth and economic development

9.3 Demand-side approach

9.3.1 Growth and Development A demand-side approach includes discretionary changes in monetary and fiscal policies with the aim of changing the level of aggregate demand. Monetary policy is driven by the South African Reserve Bank (SARB). It aims to stabilise prices by managing inflation. Fiscal policy is driven by the Department of Finance. It aims to facilitate government, political and economic objectives. A demand-side approach to economic growth and development does not only depend on fiscal and monetary policy. It is dependent on all components of aggregate demand, that is, C, I, X and G.

When you prepare for the exam, memorise CONCEPTS FIRST! 9.3.2 South African approach The South African approach uses both monetary and fiscal measures to influence aggregate demand in the economy. Monetary policy The South African Reserve Bank (SARB) as the central bank in South Africa formulates the monetary policy. They use the following instruments:

Interest rate changes It is used to influence credit creation by making credit more expensive or cheaper. The exchange rate is stabilised by encouraging inflow or outflows.
Open market transactions To restrict credit the SARB sells securities. When banks buy these securities money flows from banks to the SARB. The banks have less money to lend and cannot extend as much credit as before. To encourage credit creation the SARB buys securities. Money flows into the banking system.
Moral suasion The SARB consults with banks to act in a responsible manner based on the prevailing economic conditions.
Cash Reserve Requirements Banks are required to hold a certain minimum cash reserve in the central bank. Banks have a limited amount to give out as credit.

Fiscal policy South Africa’s fiscal policy is put into practice through the budgetary process. The main purpose of fiscal policy is to stimulate macroeconomic growth and employment, and ensure redistribution of wealth. The following instruments are used:

Progressive personal income tax Higher income earners are taxed at higher tax rates. These taxes are used to finance social development. The poor benefit more than those with higher incomes.
Wealth taxes Properties are levied (taxed) according to their market values. Transfer duties are paid when properties are bought. Securities (shares and bonds) are taxed when traded. Capital gains tax is levied on gains on the sale of capital goods (e.g. properties, shares). Estate duties are paid on the estates of the deceased. These taxes are used to finance development expenditures which benefit the poor more often.
Cash benefits Old age pensions, disability grants, child support and unemployment insurance are cash grants. These are also known as social security payments.
Benefits in kind (natura benefits) These include the provision of healthcare, education, school meals, protection etc. When user fees are charged, poor or low income earners pay less or nothing. Limited quantities of free electricity and water are provided.
Other redistribution Public works programmes, e.g. the Strategic Integrated Projects (SIP) provides employment subsidies and other cash and financial benefits such as training, financing and export incentives.
Land restitution and land redistribution Land restitution is the return of land to those that have lost it due to discriminatory laws in the past. Land redistribution focuses on land for residential (town) and production (farm) for previously disadvantaged groups. The money for these programmes is provided in the main budget.
Subsidies on properties It helps people to acquire ownership of fixed residential properties. E.g. government’s housing subsidy scheme provides funding to all people earning less than R3 500 per month.

9.4 The supply-side approach

9.4.1 Creation of growth A supply-side approach includes anything that can influence the aggregate supply of goods and services, with the focus on microeconomic components, e.g. competition and potential output. Government intervention aims to facilitate the smooth operation of markets in order to stimulate growth and development. 9.4.2 South African approach The South African approach aims at improving the effectiveness and efficiency of markets. This requires:

9.5 Evaluation of the South African approaches used in South Africa

9.5.1 Growth and development policies

Meeting basic needs: government creates an increased demand for goods and services. The expanded public works programmes were mostly labour intensive. This helped alleviate unemployment and poverty slightly.
Some social achievements: building houses, providing clean water, electrification, land reform, and healthcare.
Real GDP growth erratic since 1994, unemployment in formal sector increased.
Key objectives of poverty reduction and improved service delivery hardly successful.
Mixed outcomes.
Brought greater financial discipline and macroeconomic stability.
Real reduction in fiscal deficit (less than 3% in terms of international benchmarks).
Inflation has dropped mostly to within inflation targets.
Foreign exchange reserves increased in most regards.
Failure to create sustainable job opportunities.
Failure to redistribute wealth more evenly.
Halve unemployment and poverty by 2014.
Accelerate economic growth to an average of 6% between 2010 and 2014. Evaluation thus far:
Growth in infrastructure investment, especially in the public sector.
Employment growth has lagged behind economic growth – reason real wage increases are higher than productivity.
The second economic strategy helped slightly to reduce unemployment through the Expanded public Works Programme.
Poor economic growth and high unemployment for the youth.
Joint Initiative on Priority Skills Acquisitions (JIPSA) It is the skills development arm of ASGISA. Focus is on skills development, especially through the SETAS.
Expanded Public Works Programme (EPWP) It is a nationwide government intervention to create employment using labour-intensive methods, and to give people skills they can use to find jobs when their work in the EPWP is done.
Create 5 million jobs by 2020, reducing unemployment from 25% to 15%.
National Development Plan (NDP) It sets out to expand economic opportunities through investment in infrastructure, more innovation, private investment and entrepreneurship.
Department of Trade and Industry (DTI), Industrial Development Corporation (IDC) and the National Small Business Act offer these services.
Laws are revised to help change power imbalances.
Black Economic Empowerment Programmes (BEE) The Black Empowerment Act and Employment Equity Act were designed to assist in the transformation and redress of previously disadvantaged groups. Measures are implemented to ensure redress and affirmative action in the workplace and business environment.

9.6 The North/South divide

The table below shows different ways to distinguish between developed countries (in the North) and developing countries (in the South).

What is the message behind the cartoon? (2)
List any TWO countries involved in this phenomenon. (2)
List any TWO products displayed in the cartoon. (4) [8]
What is the main objective of Broad-Based Black Economic Empowerment? (2) [4]

Activity 3 Distinguish between economic growth and economic development. [8]

Answer to activity 3

Activity 4 Explain unequal standards of living as a characteristic of the North/South divide. [6]

This Is What You Get When Fear Mixes With Money

A close-up of Donald Trump speaking at a microphone while pointing at a crowd.

By Thomas B. Edsall

Mr. Edsall contributes a weekly column from Washington, D.C., on politics, demographics and inequality.

Donald Trump has added something to the practice of extracting money from major donors: fear.

Traditionally, high-dollar contributors write big checks for a mix of reasons: to curry favor, to support their political party, to promote an agenda, to win favorable tax and regulatory policies, to defeat the opposition, to be seen as powerful — a blend of self-interest and principle.

This year, Trump’s history in the White House and the agenda for 2025 that he and his allies have been putting together amount to a warning to wavering supporters.

According to The Washington Post , Trump has candidly warned onlookers that he will turn the federal bureaucracy into an instrument to punish those who fail to toe the MAGA line:

He wants the Justice Department to investigate onetime officials and allies who have become critical of his time in office, including his former chief of staff, John F. Kelly, and former attorney general William P. Barr, as well as his ex-attorney Ty Cobb and former Joint Chiefs of Staff chairman Gen. Mark A. Milley, according to people who have talked to him, who, like others, spoke on the condition of anonymity to describe private conversations. Trump has also talked of prosecuting officials at the F.B.I. and Justice Department, a person familiar with the matter said.

In public, Trump has vowed to appoint a special prosecutor to “go after” President Biden and his family.

The events described in the Post story

reflect Trump’s determination to harness the power of the presidency to exact revenge on those who have challenged or criticized him if he returns to the White House. The former president has frequently threatened to take punitive steps against his perceived enemies, arguing that doing so would be justified by the current prosecutions against him. Trump has claimed without evidence that the criminal charges he is facing — a total of 88 across four state and federal indictments — were made up to damage him politically.

Trump has made retribution a central theme of his campaign, seeking to intertwine his legal defense with a call for payback against perceived slights and offenses to “forgotten” Americans.

Faced with the prospect of a chief executive prepared to abandon the rule of law for the rule of revenge, many affluent donors — for whom the machinations of government can determine bankruptcy or wealth — seem to think they have little choice but to pony up to the self-proclaimed “ dictator for one day .”

Trump’s campaign to reclaim the White House — armed with the bristling Heritage Foundation playbook , which conservatives are using as a tool to pressure Trump to remain true to the hard-right agenda, as well as long, revealing lists compiled by Axios and The Times of prospective MAGA appointees — is the embodiment of the politics of intimidation.

At the core of what Trump and Heritage’s Project 2025 have proposed is an escalation of the power concentrated in the presidency and in the executive branch generally. This includes the politicization of the bureaucracy, whose mission would become, in part, to wreak revenge on Trump’s adversaries and the adoption, throughout federal departments and agencies, of policies rewarding ideological supporters and defunding ideological opponents.

Kim Lane Scheppele , a professor at Princeton of sociology and international affairs, summed up in an email the Trump-driven changes in the politics of raising money: “Most business leaders unfamiliar with autocratic government believe that when they support someone running for office, that person will owe them something if elected, tax cuts, deregulation, whatever the business leaders want.”

But, Scheppele continued, “autocrats turn the tables. Once elected, autocrats use the power of the state to squeeze business.”

In these circumstances, she added, political leaders “can threaten businesses with tax audits, more regulation, even criminal charges, unless they give in to the autocrats’ demands.”

Project 2025, Scheppele wrote,

is a blueprint for autocracy. In fact, it’s a direct copy of the plan that Viktor Orban used to take over the Hungarian government in 2010. If it is carried out, Project 2025 will concentrate huge power in the hands of the president, giving him the power to control the whole federal government at his whim. If business leaders think that this will benefit them and that giving up the rule of law is good for business, they will quickly learn that they are wrong. But it will be too late.

The Trump campaign has made it clear that Trump is not committed to adopting all the policy and personnel proposals described in Project 2025 or other documents produced outside his campaign.

At the same time, nowhere is corporate acquiescence to Trump more evident than among Republican megadonors who swore after Jan. 6, 2021, that they would never again support Trump but who are now swallowing their pride, trickling back in obeisance to the leader who betrayed them with his encouragement of the insurrection.

In February 2023, Eric Levine, one of the founders of the law firm Eiseman Levine and a prominent Republican fund-raiser, told Politico :

I don’t think it is fair to call Donald Trump a damaged candidate. He is a metastasizing cancer who if he is not stopped is going to destroy the party. Donald Trump is a loser. He is the first president since Hoover to lose the House, the Senate and the presidency in a single term.

As if that were not enough, Levine continued, Trump “is probably the only Republican in the country, if not the only person in the country, who can’t beat Joe Biden.”

Less than a month ago, however, Levine sent a memo to fellow Republicans telling them he had had a change of heart:

The adage of “never say never” is a wise one. I repeatedly said, since the Jan. 6, 2021, attack on the Capitol, that I will never vote for Donald Trump. Today, however, due to a dramatic change in circumstances, albeit reluctantly and with reservations, I have decided I will vote for Trump in November.

Levine is not alone in his return to the Trump fold. On March 29, Josh Dawsey, Jeff Stein, Michael Scherer and Elizabeth Dwoskin, reporters for The Washington Post, published “ Many G.O.P. Billionaires Balked at Jan. 6. They’re Coming Back to Trump. ”

“As hopes of a Republican alternative have crumbled,” the four Post reporters wrote, “elite donors who once balked at Trump’s fueling of the Capitol insurrection, worried about his legal problems and decried what they saw as his chaotic presidency are rediscovering their affinity for the former president — even as he praises and vows to free Jan. 6 defendants, promises mass deportations and faces 88 felony charges.”

Some examples:

The day after a pro-Trump mob stormed the Capitol on Jan. 6 , 2021, billionaire and G.O.P. megadonor Nelson Peltz called the insurrection a “disgrace” and expressed remorse for voting for Donald Trump : “I’m sorry I did that.” In early March, nonetheless, Peltz hosted a breakfast meeting at his Palm Beach mansion with Trump and such billionaire Trump backers as Steve Wynn and Isaac Perlmutter.

And similarly, “After Jan. 6, billionaire developer Robert Bigelow said Trump had ‘lost me as a supporter. … He showed that, in that particular hour, he was no commander.’” This year, “Bigelow has pledged $20 million to a pro-Trump campaign group and has given $1 million to cover the former president’s legal costs.”

Bigelow was on the host committee for a record-setting $50.5 million fund-raiser for Trump and the Republican National Committee in Palm Beach on Saturday night. The suggested price of admission: $250,000 to $814,600.

Most of the commentary on the megadonors’ return to the Trump fold suggests that self-interest and greed are the primary motivators. In describing donors’ calculations, The Washington Post wrote: “The financial upside of going with the former president may win out. Trump has discussed further cutting the corporate tax rate, and he toyed in his administration with unilaterally lowering the capital gains rate paid by investors.”

Jonathan Chait, a columnist at New York magazine, is more explicit :

Joe Biden is running on a plan to increase taxes on the very wealthy, while Trump is promising to cut those taxes. In 2025, most of the Trump tax cuts will expire, as will Obamacare subsidies extended by the Inflation Reduction Act. The 2024 elections will therefore determine whether hundreds of billions of dollars remain in the pockets of wealthy people or instead fund things like health insurance for the middle class.

Similarly, Chris Cillizza wrote in his Substack newsletter, “I will now explain to you how these wealthy people overcame their principled stances against Trump as a threat to democracy.”

The answer to all of your questions is money. Most rich people want to stay as rich as possible. Or get even richer. That is their main focus. So, when rubber meets road, that is their default setting. Principles go out the window.

The Post writers, Chait and Cillizza are right, up to a point. The about-face of these superrich donors is a mixture of greed and terror — terror of sparking the anger of a volatile politician who proudly declares, “ I am your retribution .”

Just as Trump has cowed congressional Republicans — many of whom privately voice strong criticism of him — with the threat of MAGA-driven primary challenges, he has turned himself and his agenda into weapons of intimidation for businesses seeking to survive and thrive in a second Trump administration.

A primary goal of business is predictability, if not certainty , based in part on consistent rules, regulations and laws so that corporations can make plans and investments without worrying about arbitrary government interventions based on the revenge-seeking whims of a leader many see as a malignant narcissist .

American businesses are fully aware of Trump’s willingness to govern by caprice , a modus operandi he demonstrated repeatedly during his term in the White House.

In those years, however, he was held back by his own ineptitude, the incompetence of his most loyal advisers and the interventions of his more reasonable aides and key civil servants — a combination that kept him largely in check.

Catherine Rampell summed up some of the most egregious initiatives of the Trump White House in a November 2023 Washington Post column, “ Take Trump at His Word When He Threatens to Punish His Enemies ”:

Trump also frequently deployed economic and regulatory powers against businesses deemed insufficiently loyal. For example, his administration launched a bogus antitrust investigation into some auto companies when they did not support his rollback of fuel-efficiency standards. He likewise reportedly instructed his top economic aide to interfere with the merger of AT&T and Time Warner, as punishment for critical coverage from CNN, which was then owned by Time Warner. Trump also openly mused about revoking the licenses of broadcast news outlets for, among other things, reporting that his secretary of state had called him a “moron.” Again, his underlings did not go along with him. Elsewhere, he tried to use the government procurement process to damage Amazon. According to a memoir by a top aide to then-Defense Secretary Jim Mattis, Trump “called and directed Mattis to ‘screw Amazon’ by locking them out of a chance to bid” on a defense contract.

Trump’s allies, especially those working on Project 2025, are working tirelessly to make sure that if Trump wins in November, he will not be restrained by aides or career civil servants and that instead of taking office unprepared, he will have a complete MAGA agenda from Day 1.

Separately from the report, Project 2025 has been assembling names of Trump loyalists who will take his commands seriously — and not deep-six them — to fill key spots in a second Trump administration and assembling an across-the-board agenda of legislative initiatives, executive orders and regulatory changes running the gamut from anti-abortion policies to a strategy “to bend or break the bureaucracy to the presidential will,” in the words of one of the project’s authors.

Perhaps most important, Project 2025 asserts that “President Trump’s Schedule F proposal regarding accountability in hiring must be reinstituted.”

Schedule F , which Trump sought to initiate by executive order in 2020, would turn the top 50,000 or so civil servants, who are currently protected from arbitrary firing or demotion, into political appointees under the control of his administration. Trump lost the White House before Schedule F could be applied, and Biden withdrew the executive order creating it.

For corporate America, application of Schedule F would radically escalate uncertainty. Federal officials making decisions ranging from penalties for failed occupational safety violations to initiation of antitrust proceedings, from I.R.S. rulings to the application of sanitary regulations in nursing homes would presumably have to prioritize loyalty to Trump to keep their jobs.

Fear of the consequences of Schedule F is the strongest weapon of intimidation in Trump’s fund-raising armament. A significant campaign contribution might well serve as a useful shield.

“One practical consequence of undermining the civil service is a rise in cronyism,” Vanessa Williamson , a senior fellow in governance studies at Brookings, wrote by email in response to my inquiry. “Usually we think of that in terms of the winners, the insiders getting special deals, but it is equally true that cronyism creates losers, the business elites that do not get favors or face punishment for their lack of loyalty to the ruling party.”

Trump and others on the American right, Williamson wrote,

have become enamored of Hungary’s Viktor Orban in recent years, and his regime provides a good example of how cronyism can be used to consolidate political power — not just in terms of the punitive use of regulations but in licensing and government contracting as well. Whether Trump would be able to achieve these kinds of results is deeply debatable, of course. But the model is there.

Elaborating on this theme, Jasper Theodor Kauth , a political scientist at Nuffield College, Oxford, wrote by email: “Trump’s threats to use state coercion to go after perceived personal and political opponents is evidence of his agenda to disrupt democratic norms.”

Kauth noted that he and Desmond King , a political scientist at Oxford, described these practices as “disruptive illiberalism” in their 2021 paper “ Illiberalism ”:

They keep up the appearance of honoring democratic procedures (elections) while eroding democracy through the back door — although in the case of Trump this erosion is now taking place in plain sight. These warnings need to be taken seriously regardless of their intention as they heighten the risk of a future transition to authoritarianism.

What drives the willingness of wealthy executives to abandon their principled concerns over Trump’s role in the Jan. 6 insurrection?

Rawi Abdelal , a professor of international management at Harvard Business School, argued that “fear and, frankly, naïveté are far more powerful influences than simple greed.”

Abdelal wrote by email:

What is most interesting to me is that this is not as much about Donald J. Trump, the individual, but about a moment in history. These sorts of antisystemic challenges to democratic practice are emerging across the developed world and in developing countries as well. There exists in these societies — including ours — a deep frustration with the system. Many believe that the system is simply unfair, and often it is exactly that.

Bruce Cain , a political scientist at Stanford, noted that some of the conservative victories in campaign-finance law have had the unintended consequence of strengthening “the power of elected officials to coerce donations out of the donors.”

There has always been, Cain wrote by email, “an element of hostile dependency built into campaign fund-raising. Businesses have always given money to gain access or avoid bad things happening to them if the people in power feel that certain supporters let them down.”

Until recently, Cain argued, the potential for extortion

was limited by stricter campaign contribution laws before we loosened the system up post the Citizens United decision. The irony of inviting large donors and businesses to give large or unlimited donations is that the court strengthened the implicit hostile dependency relationship between donors and Trump.

Republican donors sought the elimination of restrictions on donors in the belief that such loosening of the law “would favor them,” Cain wrote. Instead, “the dog has caught the car just as it is backing up on it,” adding: “Trump’s mafia m.o. can be counted on to take this to the extreme.”

While greed and fear are powerful motivations behind the decision to make campaign contributions to a candidate, they are not antithetical. Rather, they reinforce each other, something Trump appears to be acutely aware of.

Samuel Issacharoff , a professor of constitutional law at N.Y.U., described this dynamic in an email to me, which I will leave as the last word:

Trump governs in a swirl of corruption and intimidation. Everyone knows this and understands that in such regimes, proximity to power is key to government largess. In oligarchic regimes we see this in the sheer population concentrations in the capital city. Here, aspirants flock to Mar-a-Lago. Stable democracies rely on institutions. Fragile democracies have poorly formed institutions. Unfortunately, the new populist wave sees the unwinding of institutions in favor of personalist rule. One cannot afford to be distant from the heart of power when perks are doled out on a one-by-one basis by cronies of the top commander of the country. The rush to Trump does not, in my view, represent policy agreements with the Trump tax cuts or anything of the like. Many of those rushing to Trump actually had their taxes go up because of his retaliation against blue states through the elimination of the local tax property deduction. They are eager to contribute, and to be seen as contributing, because power and privilege flow from proximity. Trump may view himself as a latter-day Louis XIV, including in his love of gilt. But in more recent times, this is the governance style of the banana republic dictators of the 20th century and the populist antidemocrats of the 21st.

The Times is committed to publishing a diversity of letters to the editor. We’d like to hear what you think about this or any of our articles. Here are some tips . And here's our email: [email protected] .

Follow the New York Times Opinion section on Facebook , Instagram , TikTok , WhatsApp , X and Threads .

Thomas B. Edsall has been a contributor to the Times Opinion section since 2011. His column on strategic and demographic trends in American politics appears every Wednesday. He previously covered politics for The Washington Post. @ edsall

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