Ministry of education tashkent financial institute

Accumulation of gold in the population of the country (acceleration)

Accumulation of foreign currency in the population and business entities

Increase in the price of gold and foreign currency in the national currency

Depreciation of the national currency against foreign currency

Devaluation of money as a result of rising prices for goods and services

Forms of inflation


A decrease in the purchasing power of the national currency


Figure 1. Forms of inflation

As a result, businesses and the population of the country begin to accumulate freely circulating foreign currencies (US dollars, euros, Swiss francs, etc.). In the third direction, the price of gold, expressed in the national currency, will rise. As a result, there will be an accumulation of gold among the population of the country, ie acceleration.

Forms and types of inflation In international practice, there are three main forms of inflation in terms of price growth, ie the growth of money supply:

1. Calm inflation. This inflation is present in economically developed countries, in which case the prices for goods, works and services can increase by an average of 3% to 10% per year. In these countries, the money supply is maintained and the purchasing power of the national currency is maintained.

2. Severe inflation. This inflation exists in economically developing countries, in which case the prices for goods, works and services can increase from an average of 10% to 100% per year and in some cases up to 200%. As a result, the money supply will increase and the purchasing power of the national currency will decrease. The process of materialization of money among the population of the country, ie the accumulation of gold in the form of real estate, rather than the accumulation of the national currency, is intensifying.

3. Uncontrolled (hyperinflation) inflation. In this inflationary situation, prices for goods, works and services will increase by more than 1000% per year or more than 100% per month.

In this case, there will be a crisis in the national economy. As a result, production and the market operate without management, and the gap between prices and wages increases. The population of the country buys goods with paper money. This situation leads to the overflow of paper money in circulation, which is not provided by the mass of goods and services. As mentioned above, the main cause of inflation is usually not one, but several, which are closely interrelated, and are not reflected in the rise in prices, but in the rise in prices. also depends on the management. In this regard, the following forms of inflation are distinguished:

1. Transparent inflation. When demand-side macroeconomic inequality is characterized by a constant rise in prices, such inflation is called transparent inflation. Transparent inflation does not disrupt the market mechanism: prices may rise in some markets and fall in others. The main reason for this is that market mechanisms continue to exert influence, provide information on prices to the national economy in a transparent manner, promote investment and stimulate supply with the expansion of production.

2. Hidden inflation. This type of inflation is such that in some cases the prices for some consumer goods are administratively set and regulated by the state. The main purpose of this is that the state sets prices for some products at a "socially low" level. In the context of hidden inflation, a sharp rise in prices may not be observed. However, there are cases when the national currency depreciates, products can not be purchased for the money of the population.

When hidden inflation occurs in the economy, the rise in prices and income of the population is temporarily stopped. One of the main reasons for hidden inflation is administrative control over prices. As a result, the market mechanism is deformed. The extent and duration of its change will depend on the policy pursued by the state and the form of regulation. The downside of this inflation is that the unemployment rate will increase during the inflation period because production will not develop.

According to the views of foreign and national economic theory, there are the following four factors that lead to the imbalance of the national economy and the resulting inflation:

- The absolute monopoly of the state in the issuance and foreign trade of paper money;

- increase in government spending to perform modern government functions;

- The activities of trade unions to increase the salaries of employees of budgetary institutions;

- The existence of a monopoly (oligopoly) of some economic entities in the economy in the production of goods, works, services.

The factors we have mentioned above are not only interrelated, but they have different effects on the growth or decline of supply and demand. According to the methods of inflation in foreign practice, it is divided into the following types: supply inflation, demand inflation, cost inflation, credit inflation, import-related inflation, expected inflation.

As a result of the increase in production costs in supply inflation, there is an increase in prices for products, work performed and services rendered. In this type of inflation, the costs increase as a result of incomplete use of fixed assets in the production of monopoly enterprises. As a result, there will be an increase in the price of products with relatively low production costs. Demand inflation. This type of inflation increases the income of the population and businesses faster than the amount of goods actually produced, work performed and services rendered.

Typically, demand inflation occurs when the population is fully employed. As a result of the rapid growth of incomes of the population, the prices for goods, works and services will increase. In this case, any increase in demand leads to an increase in prices. Cost inflation. This type of inflation occurs as a result of rising prices for raw materials and energy resources, as well as rising prices for goods and services.

Rising world prices for raw materials and energy resources, as well as the depreciation of the national currency against foreign currencies are the main causes of cost inflation. An increase in the price of a certain product in cost inflation automatically leads to an increase in the price of other products. For example, as a result of rising world prices for petroleum products, the prices of products, works and services directly related to it will rise.

Expenditure inflation is similar to supply inflation, but it can occur when the growth of some expenditures in inflation is not directly related to the economy of the country in which it is obtained. Credit inflation. This type of inflation occurs as a result of credit expansion by the country's central and, in some countries, national banks. Central Bank for commercial banks. As a result of setting a high refinancing rate, loans to businesses will become more expensive.

Business entities include the loan and interest on it in the cost of their products, which leads to an increase in prices. Import-related inflation.

This type of inflation occurs on the basis of external factors in the country in which it is obtained. In this case, as a result of rising prices for imported products, prices for some products may rise in a chain. Expected inflation. As a result of the monetary and fiscal policy pursued by the state in this type of inflation, the analytical level of inflation for the current year is determined and regulated.

Inflation Theories In the study of the nature of inflation today, economists point to its monetary causes, ie the change in the amount of money relative to the mass of goods. In dealing with inflation, support is needed to kill its level. This support is the price index. The price index is determined by the increase (decrease) in current general consumer prices relative to prices from the base period.

In determining this index, the retail prices of goods and services included in the consumer basket of citizens of the country are used. This formula is calculated as follows:

An increase in the inflation rate can be determined by an increase in one price. For example, the price of 1 liter of gasoline in the base period was 500 soums, and its current price is 585 soums. This means that the price of 1 liter of gasoline increased by 117% during the period we observed.

In addition to the price index, the GDP index is used to manage inflation. Gross domestic product is a monetary expression of the total amount of all goods, works and services produced in the country over a period of time, usually a year. A deflator is used to measure the overall level of the GDP price index. A deflator is a coefficient used to compare monetary economic performance to the level of prices in the previous period. Using a deflator, it is possible to determine the actual wage level for a specific period.

In international practice, there are various theories on the study of the nature of inflation and its rational management. One of them is the theory developed by the famous British economist John Maynard Keynes. Keynes developed indirect support for government intervention in the market economy. With the help of this support, the state will be able to pursue an active fiscal policy, stimulate demand and reduce mass unemployment. The economic mechanism developed by Keynes consists of the following basic principles:

1. The level of employment of the population of the country is determined by the volume of production;

2. The general demand does not correspond to the supply, because certain money is spent on accumulation;

3. The volume of production is determined on the basis of entrepreneurship at the level of reasonable demand;

4. In the case of equality of investments and savings, investment and savings acts operate independently. Keynes's main idea is that the issuance of additional money increases the demand for solvency of the population. As a result, there is a basis for the increase of goods and services. Producers increase production in order to get money from buyers and replenish the mass of excess money in circulation with products and services. In international practice, the theory put forward by Keynes is called "regulated inflation." In the 60s of the last century, a new school of inflation theory was founded. The school was founded by Milton Friedman, a well-known American economist, Nobel Laureate and head of the Chicago School of Economics. In international practice, this school is called "monetarism". The main principles of the school of monetarism are: 1) "Money matters", ie credit - changes in the monetary sphere have a decisive impact on the overall state of the economy; 2) The Central Bank of the country should ensure stable growth of money supply, regardless of the economic situation in the economy. Friedman's main idea is that the level of economic development of the country, regardless of the state budget, unemployment and other macroeconomic indicators, should increase the main task of the state in monetary policy by an average of 3-5%. This idea is the opposite of Keynes's idea. Keynes argued for restrictions on the growth of the money supply and demand, while Friedman argued for the constant growth of supply and money supply. Proponents of the school of monetarism support the implementation of the following measures against inflation: - direct incentives for entrepreneurship (reduction of taxes on the part invested in profits); - reduction of government spending; - Stimulation of growth of investment funds (placement of funds of the population in commercial banks and securities).

In essence, monetarist policy is a strict policy, which requires rigidity and indifference to various democracies. It should be noted that Dj. The theories developed by Keynes and M. Friedman do not fully answer the question of a reasonable fight against inflation. Both theories have their pros and cons. The experience of developed countries shows that no matter what form and type of inflation occurs, it is always a solution to the problem of unemployment, an in-depth analysis of their interrelationship, Australian economist A. Phillips using graphs shows that inflation and unemployment are actually inversely related. proves the existence of According to him, the unemployment rate in the country is low. In turn, when inflation is high, the unemployment rate is low. We can see this in the graph below. According to A. Phillips, in countries with high inflation rates, the value of real wages falls. This situation will force different categories of the population to work to compensate for the real wages lost as a result of rising prices. As a result, there is a decrease in unemployment among the population.