Why Inflation right now could add fuel to income inequality

Follow us on Google News:
 Why Inflation right now could add fuel to income inequality
Image source: © Woodsy007 | Megapixl.com

As countries across the globe – from China to the US – have been reporting record inflation numbers, it could be having greater consequences than we can think about.

There are four types of inflation that exist: creeping inflation (when prices rise 3% a year or less), walking inflation (when inflation is between 3-10% a year), galloping inflation (when inflation rises to 10% or more) and hyperinflation (when prices skyrocket more than 50% a month).

While creeping inflation is considered beneficial for the economy, walking inflation is considered to be destructive; galloping inflation is the one that wreaks havoc on the economy and hyperinflation is something that spells doom.

With both China and the US reporting over 5% inflation rate, it may be said that both the countries are in a destructive mode as on date. In such times, people start buying more than they need to avoid, anticipating higher prices. This increased buying pushes demand even higher to a level that suppliers cannot keep pace with. More worryingly, neither can wages keep up to it. As a result, goods and services start getting out of the reach for most people.

But this destructive price hike comes at a time when the world is just coming out of the pandemic. To put it simply, either the wages of the people are still truncated, or they have just been restored. And there is an endless shopping spree that people have embarked upon. In other words, with lesser money available, people are spending way too more than needed. This will definitely hit the households’ savings, and their response to the contingencies. Once that happens, the role of state increases manifold in social security and governments across the globe have to rework on their budgets.


The content, including but not limited to any articles, news, quotes, information, data, text, reports, ratings, opinions, images, photos, graphics, graphs, charts, animations and video (Content) is a service of Kalkine Media Pty Ltd (Kalkine Media, we or us), ACN 629 651 672 and is available for personal and non-commercial use only. The principal purpose of the Content is to educate and inform. The Content does not contain or imply any recommendation or opinion intended to influence your financial decisions and must not be relied upon by you as such. Some of the Content on this website may be sponsored/non-sponsored, as applicable, but is NOT a solicitation or recommendation to buy, sell or hold the stocks of the company(s) or engage in any investment activity under discussion. Kalkine Media is neither licensed nor qualified to provide investment advice through this platform. Users should make their own enquiries about any investments and Kalkine Media strongly suggests the users to seek advice from a financial adviser, stockbroker or other professional (including taxation and legal advice), as necessary. Kalkine Media hereby disclaims any and all the liabilities to any user for any direct, indirect, implied, punitive, special, incidental or other consequential damages arising from any use of the Content on this website, which is provided without warranties. The views expressed in the Content by the guests, if any, are their own and do not necessarily represent the views or opinions of Kalkine Media. Some of the images/music that may be used on this website are copyright to their respective owner(s). Kalkine Media does not claim ownership of any of the pictures displayed/music used on this website unless stated otherwise. The images/music that may be used on this website are taken from various sources on the internet, including paid subscriptions or are believed to be in public domain. We have used reasonable efforts to accredit the source wherever it was indicated as or found to be necessary.

We use cookies to ensure that we give you the best experience on our website. If you continue to use this site we will assume that you are happy with it. OK