Why not print more money? Inflation.

Let's write down things we're grateful for!!

1. I'm grateful for this day!
2. I'm grateful for my paycheck! 
3. I'm grateful I paid 100rs instead of 50rs for a water bottle!
4. I'm grateful for inflation!!

If you couldn't understand the sarcasm in these few lines, I worry about you. No, I'm not grateful for inflation, and I'm definitely not glad for paying more than an item's worth. But economists say there is good inflation, which fattens our wallets. But what is this "good inflation"?

So, basically, too much inflation is considered bad for the economy, and too little is also bad for the economy. When I was growing up, I heard the saying "Athivrusti and Anavarushti" a lot. It means either overdoing something or not doing it at all. I really think it resonates with this concept.

According to the web, an inflation rate of 2-3% is considered good for the economy. Here is why low inflation is considered good for the economy(according to the net);

1. Stimulates Spending: A moderate level of inflation is attractive to consumers, at this time consumers rather spend than save, because they anticipate the rise in prices in the future. It also maintains purchasing power, at this time consumers can afford more goods.
2. Supports business growth: Since businesses thrive in a stable economy, this is the perfect time to plan their expenses, investments, etc.
3. Strengthens currency value: In a stable economy the currency strengthens, which reduces the costs of imports.
4. Boosts economic growth: Increased spending and buying of goods, which boosts economic growth, and creates employment opportunities.

What happens when Inflation is too high? Erosion of purchasing power(since the prices are high, it buys less and less over time.), Uncertainty and Instability(this is especially bad for business since it creates uncertainty), Hyperinflation(the constant increase in prices can lead to hyperinflation, in which the prices rise uncontrollably). When the inflation is too low, it leads to a fall in the economy which can lead to recession. 

So, the next time someone claims old sayings should be left in the past, this serves as proof that those old sayings intend much more than they imply. I personally believe that these old sayings, if incorporated into our daily life, can give great outcomes. Like the saying Athivrusti and Anavarushti teaches us about balance. While inflation might never be something we celebrate, a little knowledge on the topic might go a long way.

Well the next time you hear someone ridiculous say "Why not print more money?", I hope you think of me;)