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Inflation Behavior in Financial Crisis

In: Business and Management

Submitted By antoinerigaud01
Words 3236
Pages 13
| Inflation behavior in financial crisis. | | |

MAY 4, 2011
INDEX
INTRODUCTION | 3 | TYPES OF INFLATION | 4 | * MODERATE INFLATION | 4 | * RUNAWAY INFLATION | 4 | * HYPERINFLATION | 4 | INFLATION CAUSES | 4 | * DEMAND PULL INFLATION | 5 | * COST PUSH INFLATION | 5 | * BUILD-IN INFLATION | 5 | * FORMULA | 5 | INFLATION EFFECTS | 6 | * EXPECTED INFLATION | 6 | * UNEXPECTED INFLATION | 6 | HOW TO STOP INFLATION? | 7 | INFLATION IN DIFFERENT COUNTRIES | 8 | * GERMANY | 8 | * FRANCE | 9 | * MEXICO | 10 | * USA | 11 | * GREECE | 12 | CONCLUSION | 13 | REFERENCES | 14 |

INTRODUCTION

The main objective of this paper is to explain the behavior and the effects of the inflation from the financial crisis in several countries talking about inflation and the causes and effects and later comparing different significant countries.
The economic crisis from 2008 to 2011 is known as the world economic crisis that began that year, originates in the United States. Among the main factors causing the crisis would be high raw material prices, the overvaluation of the products, a global food and energy crisis, high world inflation and global threat of a worldwide recession, also a credit, and trust and mortgage crises on the markets. The root cause of all crises according to Austrian business cycle theory is an artificial expansion of credit.
The origin of the crisis comes from the strong expansion on the mortgage credit in the United States, in a low interest rate in nominal terms and negative rate in real terms.
Mortgage credit expansion required and increase in demand which mean lowering the terms of loans, giving them to people with dubious reputation but willing to accept in a higher rate that made extraordinary profitable this operation. Everything rested on the confidence that

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