For example, inflation and in particular food inflation is considered as one of the main reasons that caused the —11 Tunisian revolution  and the Egyptian revolution according to many observers including Robert Zoellick president of the World Bank.
Any unexpected increase in the inflation rate The effect of the egyptian revolution on consumer behavior decrease the real interest rate. Inflation can act as a drag on productivity as companies are forced to shift resources away from products and services to focus on profit and losses from currency inflation.
For example, investment in market productioninfrastructure, education, and preventive health care can all grow an economy in greater amounts than the investment spending.
For example, increases in payments to workers and pensioners often lag behind inflation, and for some people income is fixed. Tsiang noted that once substantial deflation is expected, two important effects will appear; both a result of money holding substituting for lending as a vehicle for saving.
Real bills doctrine The real bills doctrine asserts that banks should issue their money in exchange for short-term real bills of adequate value. Also, individuals or institutions with cash assets will experience a decline in the purchasing power of the cash. How many households own microwave ovens?
Currency and banking schools of economics argue the RBD, that banks should also be able to issue currency against bills of trading, which is "real bills" that they buy from merchants.
Track key industry trends, opportunities and threats. Hyperinflation If inflation becomes too high, it can cause people to severely curtail their use of the currency, leading to an acceleration in the inflation rate.
High and accelerating inflation grossly interferes with the normal workings of the economy, hurting its ability to supply goods.
Young Egyptians are driving increased demand in a wide range of consumer segments. This can lead to prolonged disequilibrium and high unemployment in the labor market.
There can also be negative impacts to trade from an increased instability in currency exchange prices caused by unpredictable inflation.
Menu costs With high inflation, firms must change their prices often to keep up with economy-wide changes. Any movement to spend those hoards "once started would become a tremendous avalanche, which could rampage for a long time before it would spend itself.
Financial market inefficiency with deflation The second effect noted by Tsiang is that when savers have substituted money holding for lending on financial markets, the role of those markets in channeling savings into investment is undermined. Mundell—Tobin effect The Nobel laureate Robert Mundell noted that moderate inflation would induce savers to substitute lending for some money holding as a means to finance future spending.
For example, an increased desire to save could not push interest rates further down and thereby stimulate investment but would instead cause additional money hoarding, driving consumer prices further down and making investment in consumer goods production thereby less attractive.
They add inefficiencies in the market, and make it difficult for companies to budget or plan long-term.
Social unrest and revolts Inflation can lead to massive demonstrations and revolutions. Thus, if a central bank has a reputation as being "soft" on inflation, when it announces a new policy of fighting inflation with restrictive monetary growth economic agents will not believe that the policy will persist; their inflationary expectations will remain high, and so will inflation.
In this view, while generally grounded in monetarism, future expectations and strategies are important for inflation as well. Debtors who have debts with a fixed nominal rate of interest will see a reduction in the "real" interest rate as the inflation rate rises.
In the 19th century the banking schools had greater influence in policy in the United States and Great Britain, while the currency schools had more influence "on the continent", that is in non-British countries, particularly in the Latin Monetary Union and the earlier Scandinavia monetary union.
In the case of collective bargaining, wage growth will be set as a function of inflationary expectations, which will be higher when inflation is high. Files are delivered directly into your account within a few minutes of purchase. On the other hand, if the central bank has a reputation of being "tough" on inflation, then such a policy announcement will be believed and inflationary expectations will come down rapidly, thus allowing inflation itself to come down rapidly with minimal economic disruption.
Moderate and stable inflation would avoid such a seesawing of price movements. Cost-push inflation High inflation can prompt employees to demand rapid wage increases, to keep up with consumer prices.Please enter your username or email address.
You will receive a link to create a new password via email. Already have an account? Login instead. Core inflation is a measure of inflation for a subset of consumer prices that excludes food and energy prices, The effect of money on inflation is most obvious when governments finance spending in a crisis, such as a civil war, by printing money excessively.
and the Egyptian revolution, according to many observers including Robert. Egypt: Reaching the consumer. In this page: Consumer Profile Consumer Behaviour Egyptian consumer behaviour has changed considerably as the country is mired into a long-term economic recession coupled with the currency devaluation.
in the aftermath of the Tahrir Revolution, the number of publications and circulation has dropped. Start studying Causes and Effects Egyptian Revolution. Learn vocabulary, terms, and more with flashcards, games, and other study tools.
Consumer Lifestyles in Egypt: Consumers face numerous financial challenges, including devalued currency, high inflation and rising food prices, which.
Jan 29, · Inthe British retails store Marks and Spenser's, entered into the small Egyptian retail market. However, before entering into the market, the company wanted to know some of Egyptian buying habits.
They questioned over men and women who live in Cairo and who were between the ages of 21 and Studies showed that.Download