In economics, inflation is a sustained increase in the general price level of goods and services in an economy over a period of time resulting in a loss of value of currency. When the price rises, each unit of currency buys fewer goods. Consequently, inflation reflects a reduction in the power per unit of money – a loss of real value in the medium of exchange. A chief measure of inflation is the inflation rate, the annualized percentage change in a general price index, usually the consumer price index. The opposite of inflation is deflation, Inflation affects economies in various positive and negative ways. Economists generally believe that high rates of inflation and hyperinflation are caused by a growth of the money supply. However, money supply growth does not necessarily cause inflation, some economists maintain that under the conditions of a liquidity trap, large monetary injections are like pushing on a string. Views on which factors determine low to moderate rates of inflation are more varied, low or moderate inflation may be attributed to fluctuations in real demand for goods and services, or changes in available supplies such as during scarcities.
However, the view is that a long sustained period of inflation is caused by money supply growing faster than the rate of economic growth. Today, most economists favor a low and steady rate of inflation, the task of keeping the rate of inflation low and stable is usually given to monetary authorities. Rapid increases in quantity of the money or in the money supply have occurred in many different societies throughout history. By diluting the gold with other metals, the government could issue more coins without needing to increase the amount of used to make them. When the cost of each coin is lowered in this way and this practice would increase the money supply but at the same time the relative value of each coin would be lowered. As the relative value of the coins becomes lower, consumers would need to give more coins in exchange for the same goods and these goods and services would experience a price increase as the value of each coin is reduced. Song Dynasty China introduced the practice of printing paper money in order to create fiat currency, during the Mongol Yuan Dynasty, the government spent a great deal of money fighting costly wars, and reacted by printing more money, leading to inflation.
Fearing the inflation that plagued the Yuan dynasty, the Ming Dynasty initially rejected the use of paper money, large infusions of gold or silver into an economy led to inflation. This was largely caused by the influx of gold and silver from the New World into Habsburg Spain. The silver spread throughout a previously cash-starved Europe and caused widespread inflation, demographic factors contributed to upward pressure on prices, with European population growth after depopulation caused by the Black Death pandemic
United States dollar
The United States dollar is the official currency of the United States and its insular territories per the United States Constitution. It is divided into 100 smaller cent units, the circulating paper money consists of Federal Reserve Notes that are denominated in United States dollars. The U. S. dollar was originally commodity money of silver as enacted by the Coinage Act of 1792 which determined the dollar to be 371 4/16 grain pure or 416 grain standard silver, the currency most used in international transactions, it is the worlds primary reserve currency. Several countries use it as their currency, and in many others it is the de facto currency. Besides the United States, it is used as the sole currency in two British Overseas Territories in the Caribbean, the British Virgin Islands and Turks and Caicos Islands. A few countries use the Federal Reserve Notes for paper money, while the country mints its own coins, or accepts U. S. coins that can be used as payment in U. S. dollars. After Nixon shock of 1971, USD became fiat currency, Article I, Section 8 of the U. S.
Constitution provides that the Congress has the power To coin money, laws implementing this power are currently codified at 31 U. S. C. Section 5112 prescribes the forms in which the United States dollars should be issued and these coins are both designated in Section 5112 as legal tender in payment of debts. The Sacagawea dollar is one example of the copper alloy dollar, the pure silver dollar is known as the American Silver Eagle. Section 5112 provides for the minting and issuance of other coins and these other coins are more fully described in Coins of the United States dollar. The Constitution provides that a regular Statement and Account of the Receipts and that provision of the Constitution is made specific by Section 331 of Title 31 of the United States Code. The sums of money reported in the Statements are currently being expressed in U. S. dollars, the U. S. dollar may therefore be described as the unit of account of the United States. The word dollar is one of the words in the first paragraph of Section 9 of Article I of the Constitution, dollars is a reference to the Spanish milled dollar, a coin that had a monetary value of 8 Spanish units of currency, or reales.
In 1792 the U. S. Congress passed a Coinage Act, Section 20 of the act provided, That the money of account of the United States shall be expressed in dollars, or units. And that all accounts in the offices and all proceedings in the courts of the United States shall be kept and had in conformity to this regulation. In other words, this act designated the United States dollar as the unit of currency of the United States, unlike the Spanish milled dollar the U. S. dollar is based upon a decimal system of values. Both one-dollar coins and notes are produced today, although the form is significantly more common
Median income is the amount that divides the income distribution into two equal groups, half having income above that amount, and half having income below that amount. Mean income is the amount obtained by dividing the total income of a group by the number of units in that group. Median income can be calculated by household income, by personal income, in 2013, Gallup published a list of countries with median household income, based on a self-reported survey of approximately 1000 adults from each country. The figures are in international dollars using purchasing power parity and are based on responses from at least 2,000 adults in each country, below is a list of the top 30 countries. The figures do not take taxes and social contributions into account, a study on the Census income data claims that when correcting for underreporting, U. S. gross median household income was $57,739 in 2010. The annual median equivalence disposable household income for selected OECD countries is shown in the table below and this is the disposable income of an equivalent adult in a household in the middle of the income distribution in a year.
Data are in United States dollars at current prices and current purchasing power parity for private consumption for the reference year, an academic study on the Census income data claims that when correcting for underreporting, U. S. gross median household income was 15% higher in 2010. The OECD uses the Census ASEC as its source for the US Since 1980, U. S. gross domestic product per capita has increased 67%, Median household income is a politically sensitive indicator. Voters can be critical of their government if they perceive that their cost of living is rising faster than their income, figure 1 shows how American incomes have changed since 1970. The last recession was the early 2000s recession and was started with the bursting of the dot-com bubble and it affected most advanced economies including the European Union and the United States. An economic recession will normally cause household incomes to decrease, often by as much as 10%, the Late-2000s recession began with the bursting of the U. S. housing bubble, which caused a problem in the dangerously exposed sub prime-mortgage market.
This in turn triggered a financial crisis. In constant price,2011 American median household income was 1. 13% lower than what it was in 1989 and this corresponds to a 0. 05% annual decrease over a 22-year period. In the mean time, GDP per capita has increased by 33. 8% or 1. 33% annually, a comparison between Median Equivalised Household Income and GDP per Capita in USD for select developed countries is shown in the chart below. In 2015, the household income spiked 5.2 percent, reaching $56,000. List of countries by average wage List of U. S
Economic inequality is the difference found in various measures of economic well-being among individuals in a group, among groups in a population, or among countries. Economic inequality is sometimes called income inequality, wealth inequality, or the wealth gap, economists generally focus on economic disparity in three metrics, wealth and consumption. The issue of inequality is relevant to notions of equity, equality of outcome. Economic inequality varies between societies, historical periods, economic structures and systems, the term can refer to cross-sectional distribution of income or wealth at any particular period, or to changes of income and wealth over longer periods of time. There are various numerical indices for measuring economic inequality, a widely used index is the Gini coefficient, but there are many other methods. Some studies say economic inequality is a problem, for example too much inequality can be destructive. However, too much income equality is destructive since it decreases the incentive for productivity, the first set of income distribution statistics for the United States covering the period from was published in 1952 by Simon Kuznets, Shares of Upper Income Groups in Income and Savings.
It relied on US federal income tax returns and Kuznets’s own estimates of US national income, National Income, economists generally consider three metrics of economic dispersion, wealth and consumption. A skilled professional may have low wealth and low income as student, low wealth and high earnings in the beginning of the career, peoples preferences determine whether they consume earnings immediately or defer consumption to the future. The distinction is important at the level of economy, There are economies with high income inequality. There are economies with low income inequality and high wealth inequality. There are different ways to measure income inequality and wealth inequality, Different choices lead to different results. g. Annual wages, including wages from part-time work or work during only part of the year, individual earnings inequality among all workers – Includes the self-employed. Individual earnings inequality among the entire working-age population – Includes those who are inactive, e. g.
students, early pensioners, household earnings inequality – Includes the earnings of all household members. Household market income inequality – Includes incomes from capital, household disposable income inequality – Includes public cash transfers received and direct taxes paid. Household adjusted disposable income inequality – Includes publicly provided services, There are many challenges in comparing data between economies, or in a single economy in different years. Examples of challenges include, Data can be based on joint taxation of couples or individual taxation, the tax authorities generally only collect information on income that is potentially taxable. The precise definition of income varies from country to country
Outside of Europe, a number of overseas territories of EU members use the euro as their currency. Additionally,210 million people worldwide as of 2013 use currencies pegged to the euro, the euro is the second largest reserve currency as well as the second most traded currency in the world after the United States dollar. The name euro was adopted on 16 December 1995 in Madrid. The euro was introduced to world markets as an accounting currency on 1 January 1999. While the euro dropped subsequently to US$0.8252 within two years, it has traded above the U. S. dollar since the end of 2002, peaking at US$1.6038 on 18 July 2008. In July 2012, the euro fell below US$1.21 for the first time in two years, following concerns raised over Greek debt and Spains troubled banking sector, as of 26 March 2017, the euro–dollar exchange rate stands at ~ US$1.07. The euro is managed and administered by the Frankfurt-based European Central Bank, as an independent central bank, the ECB has sole authority to set monetary policy.
The Eurosystem participates in the printing and distribution of notes and coins in all states. The 1992 Maastricht Treaty obliges most EU member states to adopt the euro upon meeting certain monetary and budgetary convergence criteria, all nations that have joined the EU since 1993 have pledged to adopt the euro in due course. Since 5 January 2002, the central banks and the ECB have issued euro banknotes on a joint basis. Euro banknotes do not show which central bank issued them, Eurosystem NCBs are required to accept euro banknotes put into circulation by other Eurosystem members and these banknotes are not repatriated. The ECB issues 8% of the value of banknotes issued by the Eurosystem. In practice, the ECBs banknotes are put into circulation by the NCBs and these liabilities carry interest at the main refinancing rate of the ECB. The euro is divided into 100 cents, in Community legislative acts the plural forms of euro and cent are spelled without the s, notwithstanding normal English usage.
Otherwise, normal English plurals are used, with many local variations such as centime in France. All circulating coins have a side showing the denomination or value. Due to the plurality in the European Union, the Latin alphabet version of euro is used. For the denominations except the 1-, 2- and 5-cent coins, beginning in 2007 or 2008 the old map is being replaced by a map of Europe showing countries outside the Union like Norway
Harvard Business Review
The Harvard Business Review is a general management magazine published by Harvard Business Publishing, a wholly owned subsidiary of Harvard University. It is published 6 times a year and is headquartered in Brighton, HBRs articles cover a wide range of topics that are relevant to various industries, management functions, and geographic locations. These focus on areas including leadership, organizational change, strategy, marketing, prahalad, Vijay Govindarajan, Robert S. Kaplan, Rita Gunther McGrath and others. Harvard Business Reviews worldwide English-language circulation is 250,000, HBR licenses its content for publication in thirteen languages besides English, Chinese, German, Hungarian, Japanese, Portuguese, Spanish, Taiwanese. Harvard Business Reviews mission is to improve the practice of management in a changing world, Harvard Business Review began in 1922 as a magazine for Harvard Business School. Founded under the auspices of Dean Wallace Donham, HBR was meant to be more than just a school publication.
The paper is intended to be the highest type of business journal that we can make it, and for use by the student and it is not a school paper, Donham wrote. Initially, HBRs focus was on macroeconomic trends, as well as on important developments within specific industries, following World War II, HBR emphasized the cutting-edge management techniques that were developed in large corporations, like General Motors, during that time period. Over the next three decades, the continued to refine its focus on general management issues that affect business leaders. Prominent articles published during this period include, Marketing Myopia by Theodore Levitt and Barriers and Gateways to Communication by Carl R. Rogers, in the 1980s, Theodore Levitt became the editor of Harvard Business Review and changed the magazine to make it more accessible to general audiences. Articles were shortened and the scope of the magazine was expanded to include a range of topics. In 1994, Harvard Business School formed Harvard Business Publishing as an independent entity, in 2009, HBR brought on Adi Ignatius, the former deputy managing editor of Time magazine, to be its editor-in-chief.
Ignatius oversees all operations for Harvard Business Review Group. At the time that Ignatius was hired, the U. S. was going through an economic recession, the world was desperate for new approaches. Business-as-usual was not a response, Ignatius has recalled. As a result, Ignatius re-aligned HBRs focus and goals to make sure that it delivers information in the zeitgeist that our readers are living in. Since 1959, the magazines annual McKinsey Award has recognized the two most significant Harvard Business Review articles published each year, as determined by a group of independent judges. Past winners have included Peter F. Drucker, who was honored seven times, Clayton M. Christensen, Theodore Levitt, Michael Porter, Rosabeth Moss Kanter, John Hagel III, and C. K