Ways to Reduce inflation

A look at different policies to reduce inflation.

More detail is available at

[farishpradhan]

Sir, I have my IGCSE board exams in 3 months, the economicshelp websites and videos have been a great help in clearing my doubts.
The way of describing is also how Cambridge wants it, eg. Methods, Inconsistencies and then Final solutions. Glad They cover the problems while describing the 'Ways'
+ I love his cold attitude.

[DistributistHound]

Thank you for being honest about fiscal policy

[eisjeiem]

Thanks a lot for making this topic super easy 😃 I admire your teaching 😄

[angelicadianelumban]

sir what economic policies might you recommend to the government to reduce inflation and stabilizeprices?

[lisarobertson]

Will nonessential items decrease during inflation?

[chrise]

Thank you for these series. Please let me help you to help me by explaining what is the missing part in most of lectures about economics. There is a long chain of transient cause-effect relationships, much like connecting lots of various sized cogs to a shaft, rotation of one moves the other, but during the analysis of the interaction of these cogs its important not to loose of sight what is TARGET/ACTUAL cog we're after.

In the inflation example, Companies sell goods and services at "Inflated Price", the trigger for "Inflating" this price does not really matter (cost, demand, printing etc), what is important is how to actually get that price back closer to the actual cost, after the initial cause became a new constant value part of the equation?

Having tasted the extra profits the Service/Product Providers do not have much incentive to lower their profits to a previous proportion, relative to the production costs.
Now we have a problem, the Butcher enjoys his new 25% profit margin vs 19% as it was before inflation, especially that buyers keep coming despite price increase.

So the actual objective is to force that "inflated" price go down, the TARGET cog are Sellers.
Sellers --rely--> Buyers --need--> Disposable income. Mortgages/Rent consume most of income.
By punishing the buyers, targeting their achiles tendon, they indirectly stress out the Sellers as the latter would go bust without steady profits.

Your diagram at 1:28 leaves out the most important cog, the actual TARGET - the Supply/Seller.

This might be subjective, but at least for my own understanding I had to read extra material to answer the question "WHY?". Thank you a lot for your lectures!

[DistributistHound]

How about keeping money supply always a bit behind GDP?

[johnnyk]

Sir, what happens if a government decides to increase VAT during inflationary times? Adding fuel to the fire?

[Tendertroll]

How can corporate price gouging be controlled?

[stewey]

what can you do as an individual to reduce inflation? Take your cash out of a bank, and pay off debts, and don't take on new debt. Wanna be part of the solution? There you go.

[lukeatbrandynightful]

Here’s what I don’t get, during lockdown, millions were on furlough and getting paid 20% less than the normal wage, so surely this means people had less money to spend meaning there was less demand to buy good? But inflation still rocketed? How did that happen?

[justingamroth]

What about polices where you stop letting corporations increase the cost of goods and freeze wage increase