Wednesday, 25 April 2012


Inflation  is  the general price increase  caused by  factors  on both the demand and supply side of the economy. The monetarists  say it is brought about by alot  of money in circulation  which will eventually depreciate in value since money  is expected to be a scarce medium of exchange. The Keynesians  say it is caused when the aggregate demand  for  basic commodites like food,fuel prices is higher  than the aggregate supply. This is called the supply shock kind of inflation.
However, for it to be controlled, various  measures like the monetary and fiscal  policies  have to work hand  in hand. I  commend  the central  bank of Uganda for  the wonderful work  done so far for lowering the headline inflation rate to 21.2% by March 2012 from 30.4% in November 2011.

No comments:

Post a Comment