Throughout the paper, the definition of both inflation and deflation has been discussed from the Russia-Ukraine's combat's perspective, on the other hand, from the point of view of the massive IT Companies' cutting of employees, the definition of deflation has been discussed. Which kinds of negative effects are falling into the world's economy ,all of them have been discussed throughout the paper.
1. ➢ Attempt to Find out Inflation and from the
Geological-Political-Economical, International
Relationship Point of View:
In the current time, the world’s economy is facing the worst conditions, and
eventually, global inflation all over the world is increasing due to COVID-19
and the post-COVID combat between Russia and Ukraine. However, there are
many reasons for the uprising's worldwide price hike, and its aftermath has been
showing a tremendous global price hike.
Commodities
For which reason, price hikes increase
➢ The decline of commodities’ production
➢ The declination of commodities' "supply level
➢ The increase in commodity demands
2. 2
*** With the relationship between the production of product and the supply of
products are positive, but the relationship between the products' production and
the products' demands are reverse, and so, the reverse between products'
production and products demands influence the price level.
Money
➢ The increase in the supply of money
➢ The reduction of the value of money
➢ The reduction of the purchasing money
The relationship between price level and the value of money or the
purchase of money
➢ When a large sum of money is spent on the purchase of a small quantity
of goods/commodities/services, the price rises.
➢ When the supply of money increases more than the production of goods
or services, inflation soars.
➢ When the supply of money increases faster than the supply of
commodities, inflation takes place.
3. 3
➢ When the demands of money get higher than the demands of daily
commodities, inflation rises.
However, there is a reverse relationship between price level and money’s value.
When the price level of daily commodities and services increases, the value of
money will diminish, and in the language of the economy, this is defined as
inflation.
So, the question arises in our minds: why will the value of money reduce, and
why will the price level of daily goods and services increase? How much will
the value of money reduce its availability in the international market, or when
how much amount of money is of the buyer’s possession. In spite of having
supply of money, the dimension of the reduction in production and supply of
the products in the market extends the price level of the products. And at that
time, inflation takes place in the economy.
For instance, as a result of the Russia-Ukraine combat, the global deficiency of
the production of oil and gas has been increased due to geo-economic and
political instabilities. Whatever, Russia is one of the countries for oil and gas
production. In the international market, the production and the supply of oil and
gas are dwindling due to Russia's reserved policy, creating a paucity among the
4. 4
USA and EU-affiliated countries on the oil and gas supply issue. In the
international market, the artificial crisis created by the Russia-Ukraine battle
persuades people to search for other oil and gas markets, reducing their
monopolistic dependence on Russia. On the other hand, when OPEC-affiliated
countries increase the prices of oil and gas, that situation causes inflation.
Import cost of oil and gas is destined by the OPEC affiliated countries on the
basis of analyzing the international market of oil and gas for their prime
importers. USA and EU affiliated countries expense a high amount of money
in the import of oil and gas. If we discuss the whole scenario, we can see that
the import cost of both oil and gas are being increased that are reducing the
value of money. Because, with the highest amount of money, a limited amount
of oil and gases are being purchasing that scenario indicates inflation. For the
limited amount of oil and gas purchasing, a high amount of money is being
expensed by USA and EU affiliated countries, on the other hand, OPEC
affiliated countries are being profitable and enriched in the international market.
Moreover, USA and EU affiliated countries’ oil and gas’ production is lower
than the supply of money, and USA and EU affiliated countries’ oil and gas’
demands are higher than the supply of money or the purchasing power of
money. In fact, this economic scenario proves the presence of a global price
hike.
5. 5
➢ Attempt to Find out Deflation and from the
Technological Point of View:
Therefore, technological giant companies like Google, Twitter, Amazon, and
Microsoft are cutting off many employees, and for that’s, unemployment is
increasing on a large scale in the technological platforms of which aftermaths
are declining of living standards, and per capita incomes.
So, for what reason are giant technological companies cutting off the number
of employees? For what reason is the employment vacancy being created in the
sector? Why are the living standards and per-capita incomes of deviated tech
employees becoming lower? Do technological organizers have deficiencies in
the four ingredients of production?
Yes, due to the deficiency of capital, giant technological companies cut off the
numbers of employees, which is why unemployment soars up. Also, the living
standard and per-capita income of the employed technological employees are
6. 6
at a lower rate. Also, the technological organizers have the deficiency in the
reconciliation’s case (lack of highest profit, wage, and efficiency of
organization).
Particularly, owing to the paucity of money, they are losing their job platforms,
which indicates unemployment in the language of the economy. For those who
are becoming jobless, their living standards and per capita income have been
reducing, and so this economic scenario goes to deflation.
Furthermore, the giant technological companies' limited savings and the
increasing level of the rate of interest from the international banks in giving off
debt reduces the investment, and consequently, employment reduces, and
eventually, unemployment increases. This whole scenario is defined as
deflation in economics’ language.
7. 7
When the supply of tech-related services becomes higher than the supply of
money, the demands for tech-related services will be reduced, which is known
as deflation.
Reduction of
Investment
Reduction of
Employment
Increase of
Unemployment
Deflation
in
Diagram
the reduction of
the money supply
the increase in
the supply of I-
tech services
The increase in the
value of money
Money
shortage
8. 8
➢ The reduction of the money supply
➢ The increase in the supply of I-tech services
➢ The increase in the value of money
➢ Money shortage
When money's supply is lower than the production of tech-related services, at
that time, a vast of the I-Tech services are to purchase with the lower amount
of money. IN this case, the prime priority of deflation.
Above all, from the technological perspective, deflation’s definition and its
pragmatic practice in the technological sector prove why deflation takes place,
and for what reason deflation effects have been reflected in the technological
area.