THE IMPACT OF INFLATION ON THE ECONOMY AND STANDARD OF LIVING
DOI:
https://doi.org/10.59864/FinAdv310103SAKeywords:
inflation, macroeconomic stability, standard of living, purchasing power, economic policyAbstract
Inflation represents one of the most significant macroeconomic challenges of modern economies, with direct and indirect implica-tions for economic growth, market stability, and the standard of living of the population. As a continuous increase in the general price level, inflation affects the real value of money, income dis-tribution, and economic decision-making at the level of individu-als, companies, and the state. The aim of this paper is to analyze the causes, dynamics, and consequences of inflation, with a par-ticular focus on its impact on economic activity and the quality of life of citizens. This paper employs descriptive, analytical, and comparative meth-ods, using secondary data sources from relevant scientific litera-ture and reports of international and national institutions. Special attention is given to distinguishing between the short-term and long-term effects of inflation, as well as its redistributive conse-quences.Downloads
References
1. Arandarenko, M. (2020). Uticaj inflacije na realne zarade u tranzicionim ekonomijama. Beograd: Ekonomski insti-tut.
2. Arsić, M. (2018). Inflacija i socijalna politika u zemljama u razvoju. Novi Sad: Univerzitet u Novom Sadu, Ekonomski fakultet.
3. Bernanke, B. S. (2020). Monetary policy strategies in tur-bulent times. Journal of Economic Perspectives, 34(3), 45–68.
4. Bernanke, B. S., & Blanchard, O. (2023). Post pandemic inflation dynamics: Supply shocks and demand pressures. Journal of Macroeconomic Analysis, 12(1), 23–48.
5. Borio, C., Disyatat, P., & Juselius, M. (2022). Rethinking inflation modelling: Global factors and monetary policy. International Journal of Central Banking, 18(4), 1–34.
6. Caldara, D., Herbst, E., Rao, M., & Williams, J. C. (2022). The macroeconomic impact of energy price shocks. Re-view of Economic Studies, 89(2), 531–552.
7. Coibion, O., Gorodnichenko, Y., & Weber, M. (2022). In-flation expectations, consumer behavior, and consumer in-flation perceptions: A new approach. Journal of Monetary Economics, 124, 101–135.
8. Deaton, A. (2022). The analysis of household surveys: A microeconometric approach to development policy (2nd ed.). Johns Hopkins University Press.
9. Doepke, M., & Schneider, M. (2022). Inflation and the re-distribution of wealth. Journal of Political Economy, 130(5), 1213–1254.
10. Goodhart, C., & Pradhan, M. (2020). Demographics will reverse three multi decade global trends. BIS Working Papers No. 838.
11. Jaravel, X. (2021). The unequal gains from product inno-vations: Evidence from prices. Quarterly Journal of Eco-nomics, 136(3), 1733–1784.
12. Johnston, J. (2017). Econometric methods (5th ed.). McGraw Hill Education.
13. Khan, M. S., & Senhadji, A. S. (2001). Threshold effects in the relationship between inflation and growth. IMF Staff Papers, 48(1), 1–21.
14. Janković, G., Golubović, M. (2024). Analysis of the im-pact of the circular economy concept on economic devel-opment. Održivi razvoj, 6(1), 7-31. https://doi.org/10.5937/OdrRaz2401007J
15. Krippendorff, K. (2018). Content analysis: An introduc-tion to its methodology (4th ed.). Sage Publications.
16. Krugman, P., & Wells, R. (2018). Economics (5th ed.). Worth Publishers.
17. Leeper, E. M. (2021). Fiscal–monetary policy interactions: A survey. Federal Reserve Bank Economic Research, Working Paper.
18. Leeper, E. M., & Leith, C. (2023). Fiscal dominance and inflation control. Journal of Economic Dynamics and Con-trol, 145, 104–120.
19. Mankiw, N. G. (2021). Principles of economics (9th ed.). Cengage Learning.
20. Narodna banka Srbije. (2023). Izveštaj o inflaciji. Beograd: NBS.
21. Petrović, P. (2021). Spoljnotrgovinski efekti inflacije u re-gionu. Ekonomski Pregled, 72(6), 567–589.
22. Petrović, S., & Brčerević, I. (2019). Poslovni ambijent i inflacioni rizici u Srbiji. Market: Međunarodni časopis za biznis i ekonomske perspektive, 31(2), 205–220.
23. Samuelson, P. A., & Nordhaus, W. D. (2010). Economics (19th ed.). McGraw Hill Education.
24. Stiglitz, J. E. (2015). The great divide: Unequal societies and what we can do about them. W.W. Norton & Compa-ny.
25. Stojanović, M. (2017). Finansijsko ponašanje domaćinsta-va u uslovima inflacije: slučaj Srbije. Finansijska teorija i praksa, 41(2), 123–140.
26. Stock, J. H., & Watson, M. W. (2020). Introduction to econometrics (4th ed.). Pearson.
Downloads
Published
Issue
Section
License
Copyright (c) 2026 Slobodan Andzic, Slobodan Nicin, Aleksandar Milanovic (Author)
This work is licensed under a Creative Commons Attribution 4.0 International License.
