The inflation represents the increase of the general level of prices in a economy, in a certain period of time. This means that the prices of goods and services had generally increased in the reviewed period of time.
In the last century the global inflation constantly increased, with a small acceleration in the last few decades. Many economists fear that the global recession could be followed by a significant rise of the global inflation.
All major economies had financial problems during the global crisis and they all needed to take some measures aiming to revive the economy. Some economist fear that once the economies are revived and start to accelerate, the things might out of control.
When the economy passes through a down period, the people and the companies spend less money, the prices of goods and services tend to fall and the inflation becomes deflation. At this point the government are forced to rake action and to throw money into economy, to stimulate consumption. This is the main form to fight the natural recession in economy.
Once the economy is revived the consumers start to spend their money and the amount of money circulating is larger than before. The governments should turn their politics the other way around by taking out money from the economy. The economists say that this would probably not happen and so the inflation will rise freely.
Many countries that had difficulties during the global crisis didn’t have money to throw into economy so they turned to external loans, increasing their national debts. These countries with large debts will probably encourage inflation as the debts will lose their value.
Recent statistics show that the prices for food increased recently all over the world and this should be an alarm signal for major economies that have a strong impact to the global economy. The countries in G8 should be among the first to fight inflation, having the power to influence the global economy.