Moderate Inflation Is Beneficial to Society 通货膨胀的英语论文.doc

moderate inflation is beneficial to societyin economics, inflation is the phenomenon of prices of goods and services generally rising in an economy during a period of time (barro 895). there are complex factors contributing to the phenomenon and yet no economist has a definite conclusion. inflation is more commonly induced by increases in aggregate demand (gordon 728). through analyzing the causes, it is believed that moderate inflation is beneficial to society in many aspects.demand inflation is generally induced by private and government spending and its good for economic recovery. the financial crisis of 2007 to 2008 overwhelmed the world and many countries faced recession. governments delivered a series of policies to restore their economies. for instance, china initiated the positive fiscal policy and launched an economic stimulus package of 4000 billion (). the congress in the united states of america also approved the policy of quantitative easing (). what those governments did definitely caused inflation but at that time inflation was needed because they could stimulate market demand, which was good for economic recovery.demand inflation encourages market development and expansion is inevitable, which can definitely reduce the unemployment rate. in 1958, phillips described in a paper his observation an inverse relation between inflation and unemployment, that is higher unemployment in an economy is correlated with a lower rate of inflation (fisher 496-502). according to the statistics from the eu, the unemployment rate of the euro zone in march of 2009 is 8.9% and the inflation rate was 0.6% (). in china and other developing countries, the unemployment rate is relatively lower and the inflation rate is higher. for china, unemployment rate is approximately 4% and the inflation rate is nearly 5% (cara associated press, retrieved 30 dec, 2010.). these examples explicitly indicate the inverse relation between inflation and unemployment rate.demand inflation somewhat indicates that money in the market increased, which is partly caused by increasing investment, including investment in non-profit capital projects. during 2009 to 2010, china was under the condition that the inflation rate was relatively high and chinas government simultaneously invested more money in the countryside to reinforce foundation construction and improve healthcare (bradsher the new york times,19 feb 2008). currently, chinas inflation rate is comparatively lower than that a few years ago and its investment in foundation construction and healthcare has decreased. the comparison illustrates the positive correlation that moderate inflation and non-profit capital investment.the above information demonstrates that inflation does not merely have disadvantages as is generally considered, but it also was some advantages. moderate inflation is beneficial to economic recovery, descent of unemployment rate and non-profit capital projects. if governments can handle inflation well, it will greatly prompt social development. however, we should also be aware that inflation cannot be excessive. otherwise it will jeopardize society. works citedbarro, robert j. macroeconomics: 1997. cambridge, mass: mit press.bradsher, keith. “chinas inflation rose to 7.1% in january.” new york times 19 february, 2008.cara, anna. “china inflation rate at 5.1 percent.” (december 12, 2010). associated press. retrieved december 30, 2010. fisher, irving. “i discovered the phillips curvea statistical relation between unemployment and price changes.” the journal of political economy, vol. 81, no. 2, part 1 (mar. - apr., 1973), pp. 496-502. gordon, robert j. macroeconomicstheory and policy, 2nd ed. chicago: university of chicago press,1988 the website of china financialyst 中国金融家. jinrong weiji dashiji 金融危机大事记 ”the chronicle of financial crises.” 14 august 2009 the website of chinese minister of commerce 中国商务部网站. ouyuanqu chengxian gaoshiyelv he ditongzhanglv bingcun jumian 欧元区呈现高失业率和低通胀率并存局面”