《Brief principles of macroeconomics _部分2》由会员分享，可在线阅读，更多相关《Brief principles of macroeconomics _部分2（6页珍藏版）》请在金锄头文库上搜索。
1、BriefBrief principlesprinciples ofof macroeconomicsmacroeconomics _ _部分部分 2 2C H A P T E R 12 Money Growth and Inflation oday, if you want to buy an ice-cream cone, youll need at least a couple of dollars, but that has not always been the case. In the 1930s, my grand- Tmother ran a sweet shop in Tre
2、nton, New Jersey, and she sold ice-cream cones in two sizes. A cone with a small scoop of ice cream cost three cents. Hungry customers could buy a large scoop for a nickel. You may not be surprised at the increase in the price of ice cream. In our econ- omy, most prices tend to rise over time. This
3、increase in the overall level of prices is called inflation. Earlier in the book, we examined how economists measure the inflation rate as the percentage change in the consumer price index CPI , the GDP deflator, or some other index of the overall price level. These price indexes show that, over the
4、 past 70 years, prices have risen on average about 4 percent per year. Accumulated over so many years, a 4 percent annual inflation rate leads to a six- teenfold increase in the price level. Inflation may seem natural and inevitable to a person who grew up in the United States during recent decades,
5、 but in fact, it is not inevitable at all. There were long periods in the 19th century during which most prices fella phenomenon called deflation. The average level of prices in the U.S. economy was 23 percent lower in 1896 than in 1880, and this deflation was a major issue in the presidential elect
6、ion of 1896. Farmers, who had accumulated large debts, suffered when the fall in crop prices reduced their incomes and thus their ability to pay off their debts. They advocated government policies to reverse the deflation. 247 Copyright 2009 Cengage Learning, Inc. All Rights Reserved. May not be cop
7、ied, scanned, or duplicated, in whole or in part. 248 PART V MONEY AND PRICES IN THE LONG RUN Although inflation has been the norm in more recent history, there has been substantial variation in the rate at which prices rise. During the 1990s, prices rose at an average rate of about 2 percent per ye
8、ar. By contrast, in the 1970s, prices rose by 7 percent per year, which meant a doubling of the price level over the decade. The public often views such high rates of inflation as a major economic problem. In fact, when President Jimmy Carter ran for reelection in 1980, challenger Ron- ald Reagan po
9、inted to high inflation as one of the failures of Carters economic policy. International data show an even broader range of inflation experiences. In 2007, while the U.S. inflation rate was about 4 percent, inflation was 0.7 percent in Japan, 13 percent in Russia, and 25 percent in Venezuela. And ev
10、en the high inflation rates in Russia and Venezuela are moderate by some standards. In Feb- ruary 2008, the central bank of Zimbabwe announced the inflation rate in its economy had reached 24,000 percent, while some independent estimates put the figure even higher. An extraordinarily high rate of inflation such as this is called
