Running head: Inflation 1

Annotated Bibliography: Inflation

Caitlyn Fuchs

Lone Star College-CyFair

ENGL 1302 section 5003

Professor Turner

November 4, 2022

Author Note

This paper was prepared for English 1302, section 5003, taught by Professor Turner.
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Inflation

It is unavoidable that a phenomenon such as inflation, which is a rise in prices over time,

will directly impact people's lives. Consumers usually benefit from a slight price increase

because it correlates with rising wages; however, a drastic increase can be devastating.

According to the U.S. government, inflation levels are estimated using the consumer price index

(CPI). Based on the CPI, the Federal Reserve, also known as the Fed, determines whether to

decrease inflation or stimulate it. As the Bureau of Labor Statistics points out, the Consumer

Price Index (CPI) is a basis on which many analysts conduct their analyses, using it as a

component of their analyses. The Fed has recently launched a controversial program known as

quantitative easing (QE) to induce inflation in the U.S. economy. As a result of the recession that

began in December 2007, the Fed believes that inflation is too low, putting the economy in

danger. Several critics have argued that food and energy prices significantly contribute to

inflation. The Fed, however, should consider the costs of these commodities when determining

its course of action, according to critics. They argue that food and fuel prices affect not only

individuals' lives but also commodities prices; therefore, the Fed should pay attention to these

prices when making policy decisions. Some argue that the government cannot reverse

inflationary trends by double dipping. They claim the government is capable of doing so, but

they fear that if they do, the U.S. will plunge into deflation-a fall in prices and wages. An

economy can suffer severe problems if caught up in a deflationary spiral, which can cause it to

spiral further and further down a downward spiral that will have no end.

Inflation. (2022). In Gale Opposing Viewpoints Online Collection. Gale.

https://link.gale.com/apps/doc/PC3010999179/OVIC?u=nhmccd_main&sid=bookmark-

OVIC&xid=4f9e04b7
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Introduces the concept of inflation, the rate at which a consumer's purchasing power

changes. Economically, it refers to an increase in consumer prices or a decrease in currency

value. Consumer price indexes (CPI) are used to measure inflation to monitor the cost of

essential goods and services. Economists identify a wide variety of types of inflation, which can

be categorized as percentage-based inflation or because of supply-and-demand factors, such as

supply and demand for those supplies. The impact of high inflation rates on businesses and

consumers is profound. To maintain profitability, companies must somehow recover labor and

production costs. It is generally the case that consumers see their purchasing power erode as

wages tend to follow price increases during periods of inflationary surges. As a result of factors

related to the COVID-19 pandemic, the United States and many other developed countries

experienced very high inflation rates in 2021–2022. As a result of high inflation rates in the

United States since the early 1980s, the price level reached unprecedented levels. During the

inflationary surge of 2021–2022, President Biden's administration bore the brunt of the blame for

fast-rising prices.

Should food and energy prices be included in inflation estimates? (2011, February 22).

Retrieved October 28, 2022, from

https://icof-infobase-com.lscsproxy2.lonestar.edu/articles/QXJ0aWNsZVRleHQ6MTk1NDA=.

According to Gregg, controlling inflation in the United States will be long and

challenging. Over half of Americans have a vague or no memory of the inflation that affected the

US economy between 1974 and 1983. Gregg notes that if the Federal Reserve does not act to

stop rising inflation and regain price stability, interest rates will continue to soar, making

obtaining credit more difficult. As variable interest rates rise, millions of people with mortgages
Inflation 4

may face significant increases in their monthly payments. In addition, those looking to purchase

may need help affording the larger down payments that would lower their interest rate.

Gregg, S. (2022). Tackling Inflation Will Be Painful for Americans. In Gale Opposing

Viewpoints Online Collection. Gale. (Reprinted from Get Ready: Fighting Inflation Is Hard, Messy,

and There Will Be Casualties, National Review, 2022, April

21) https://link.gale.com/apps/doc/BYGSCY741247276/OVIC?u=nhmccd_main&sid=bookmark-

OVIC&xid=03316018

Polychroniou presents the following viewpoint on inflation in his interview with global

sustainable development expert Alastair Smith. Smith argues that rising fuel prices and shortages

of truck drivers in some regions are driving inflation due to a growing trade deficit and increased

shipping costs. Although Smith indicates that the United Nations (UN) Food and Agriculture

Organization (FAO) has shown that nominal food prices have increased significantly since 2000,

accurate prices have continued to rise since 2000. However, food access has decreased

dramatically since then. He recommends implementing a Universal Basic Income (UBI) to

dampen inflation over the long run and fund the program through progressive taxation.

Polychroniou, C. J. (2022). Inflation Policies Must Tackle Rising Food Prices in Poor

Communities. In Gale Opposing Viewpoints Online Collection. Gale. (Reprinted from Inflation

Policies Must Deal With Impact of Rising Food Prices on the Poor, Truthout, 2022, February

1) https://link.gale.com/apps/doc/JZTIPU395296444/OVIC?u=nhmccd_main&sid=bookmark-

OVIC&xid=7a2b52c0

A debate is underway over whether the inflation rate is due to too much stimulus or

temporary, pandemic-induced supply-chain pressures suffering from inflation may not share the

pain equally. An individual's inflation rate depends on the goods and services they purchase and
Inflation 5

where they live and shop. However, although the federal government has the data, it does not

report in detail the growth of individual incomes for different groups. Thus, without this data,

economists cannot determine if wage growth is outpacing price growth for various groups:

considering inflation's unequal impact across income groups could have a significant effect on

policy formulation. The situation facing the poor would undoubtedly influence those supporting

strengthening social safety nets; a discussion about inflation inequality should accompany the

conversation about income inequality. Even so, the federal government does not release data

illustrating how rising prices affect Americans across various income levels. The government

would benefit from critical policy discussions involving lower-income individuals. Without it,

there may be a distortion of the economic picture. A candid discussion of inflation inequality

would better understand how price increases affect broad population segments. It is widely

understood that a person's financial situation depends on whether their income grows faster than

their living cost.

Goolsbee, A. (2021). The Missing Data in the Inflation Debate: Guest Essay. Retrieved

October 30, 2022, from

While the government has scrambled to prevent inflation from rising further, inflation

continues to increase with no end, a disturbing sign for the U.S. economy. Following a period of

deterrence of inflation for much of 2021, the Biden administration and Federal Reserve switched

sharply towards bringing prices down; the Fed has rapidly increased interest rates to slow down

inflation without causing a severe economic downturn. Consumer spending should be decreased,

and businesses will only be able to increase wages if borrowing costs are raised sufficiently to

boost borrowing costs. Slow economic activity reduces demand for goods and services, allowing

firms to meet them without raising prices. However, experts believe Americans are full of pent-
Inflation 6

up energy and money to spend. In the event of a lockdown, economists predicted that consumers

would shift their spending from goods to services, such as increased spending on travel, dining,

entertainment, and healthcare. Even though pandemic-related supply shocks have diminished,

the war in Ukraine has caused profound shocks to the global food, energy, and commodity

markets. Pressure is also being exerted on the Biden administration to take further action to

address supply chain issues due to fears of a Fed-induced recession. To fill the void created by

the sanctions against Russia, the president has begun selling oil from the Strategic Petroleum

Reserve to prevent shipping companies from increasing rates. Nevertheless, Biden and the fossil

fuel industry are also involved in a public dispute over how to expand refinery capacity, which

the global demand for oil products has strained.

Lane, S. (2022, July 13). The government has tried to stop inflation. why isn't it working?

The Hill. Retrieved October 30, 2022, from https://thehill.com/policy/3558317-the-government-

has-tried-to-stop-inflation-why-isnt-it-working/

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References

Buchanan, N. H. (n.d.). How Did the Public Discussion About Inflation Become Even

More Ridiculous? Verdict.justia.com. Retrieved October 31, 2022, from

https://verdict.justia.com/2022/06/09/how-did-the-public-discussion-about-inflation-become-

even-more-ridiculous

de Rugy, V. (2022, June 13). State and local governments have a role to play in combatting
inflation ... mercatus.org. Retrieved November 1, 2022, from
https://www.mercatus.org/publications/inflation/state-and-local-governments-have-role-
play-combatting-inflation

Furman, J. (2022, March 21). Will anchored inflation expectations actually anchor inflation?
PIIE. Retrieved November 1, 2022, from https://www.piie.com/blogs/realtime-economic-
issues-watch/will-anchored-inflation-expectations-actually-anchor-inflation

Goolsbee, A. (2021). The Missing Data in the Inflation Debate: Guest Essay. Retrieved

October 30, 2022, from

Gregg, S. (2022). Tackling Inflation Will Be Painful for Americans. In Gale Opposing

Viewpoints Online Collection. Gale. (Reprinted from Get Ready: Fighting Inflation Is Hard,

Messy, and There Will Be Casualties, National Review, 2022, April

21) https://link.gale.com/apps/doc/BYGSCY741247276/OVIC?

u=nhmccd_main&sid=bookmark-OVIC&xid=03316018

Inflation. (2022). In Gale Opposing Viewpoints Online Collection. Gale.

https://link.gale.com/apps/doc/PC3010999179/OVIC?u=nhmccd_main&sid=bookmark-

OVIC&xid=4f9e04b7
Inflation 8

Lane, S. (2022, July 13). The government has tried to stop inflation. why isn't it working?

The Hill. Retrieved October 30, 2022, from https://thehill.com/policy/3558317-the-government-

has-tried-to-stop-inflation-why-isnt-it-working/

Marsh, L. C. (2022, August 1). How can the Federal Reserve stop inflation without causing a
recession? Economics Forum. Retrieved November 1, 2022, from
https://www.aeaweb.org/forum/2399/federal-reserve-stop-inflation-without-causing-
recession

Polychroniou, C. J. (2022). Inflation Policies Must Tackle Rising Food Prices in Poor

Communities. In Gale Opposing Viewpoints Online Collection. Gale. (Reprinted from Inflation

Policies Must Deal With Impact of Rising Food Prices on the Poor, Truthout, 2022, February

1) https://link.gale.com/apps/doc/JZTIPU395296444/OVIC?u=nhmccd_main&sid=bookmark-

OVIC&xid=7a2b52c0

Should food and energy prices be included in inflation estimates? (2011, February 22).

Retrieved October 28, 2022, from

https://icof-infobase-com.lscsproxy2.lonestar.edu/articles/QXJ0aWNsZVRleHQ6MTk1NDA=.
Inflation 9