Printing More Money During the Inflation

[Jasmine]

One of the common strategies used by the governments around the world to curb inflation is to print more money. When there is inflation, the value of money decreases, the amount of money that could buy certain things will not be able to buy the same thing, you need more money to buy the same thing. Therefore, there will be scarcity of money in the market. That’s why governments start printing more money. However, this strategy has a domino effect. When more money is printed, there will be more money in the market but the price of commodity will not decrease (because there is inflation), the value of money will even decrease further. Thus printing more money does not sold problem of inflation.

In order to curb inflation, governments should stop printing more money. By doing this the value of money does not go further down. It will be difficult in the beginning, but slowly the inflation will be under control.

 

[Mika]

Inflation basically occurs during a recession. Recession means lack of economic activities. There are many reasons for recession. Some of the reasons are purely financial, for example, when the market peaks, it will start coming down as the market cannot always remain bullish. Some reasons for recession are not in any way related to finance or economics. For example, the current global recession started because of corona pandemic and continued due to war in Ukraine. The recession is expected to continue until the war will come to logical conclusion. When there is recession, purchasing power parity decreases, which means the value of money decreases. In order to tame this situation, governments print more money. There was a time when the governments had to back their currencies through gold or foreign cutting, and currently this is not a requirement , therefore, governments can print as much banknotes they want. However, this is bad for economy.