what are the Causes of inflation

It is worthwhile to focus on the causes of inflation, which is one of the most important economic indicators that countries stand on to reduce it, and these reasons are represented by the following.

the Causes of inflation:-

1)- High money supply:-

The money supply plays an important role in the process of determining the price level, so the high money supply (liquidity) in the markets is one of the main causes of inflation, and this occurs when the process of increasing the money supply is the printing of money by the state represented by the central bank, and this The increase is higher than economic growth, which would reduce the value of the currency.

2)- Rising costs:-

Rising costs are also known as "cost inflation", which is the rise in prices resulting from the high cost of materials and tools used in the production process, in addition to the high wages of labor involved in the production process.

It is also worth noting that the inflation resulting from high costs is being charged to consumers, in the form of higher prices for the goods and services they want to consume. [2] For example: what happened in the United States of America in 2021, where the cost of wood used in the process of building homes increased. Which led to an increase in the prices of homes and homes, and thus led to inflation.3)- Imposing taxes:- Taxes are one of the main sources of state revenue. When the state imposes a set of taxes, whether these taxes are direct or indirectly such as value-added tax, this leads to a high rate of inflation in the state, especially if the process of imposing taxes is not justified or studied. [3] When the state imposes taxes on various production processes, this leads to raising the total cost of products and services provided in the markets, and inevitably it will lead to raising the prices of those services and products, which leads us to predict a rise in the rate of inflation.

4)- exchange rate:-

The exchange rate, as one of the causes of inflation, is intended to express the situation in which the value of the local currency of the country is less than the foreign currency, then the purchasing power of the local currency becomes low, which makes the value of imported products expensive for all consumers in the country, and therefore no They can afford to pay for it, and this results in inflation.

5)-Rising wages:-

What is meant by rising wages as one of the reasons for the occurrence of inflation, is the rise in labor wages to a large extent and is not studied by companies and institutions, where companies transfer this cost - the cost of raising wages - to the prices of the products and services they provide, and thus consumers of goods pay this cost, the matter which leads to inflation.

It should be noted here that giving workers decent wages that lead them to live in dignity and luxury is required, and companies must conduct studies to determine decent and appropriate wages for workers without exaggeration, which in turn leads to inflation.

6)- low productivity:-

When companies and institutions become less productive, this leads to an increase in the prices of goods that consumers will flock to due to the lack of availability and abundance in the markets, which eventually leads to inflation.

In the event of a decrease in productivity, countries must encourage raising the level of productivity by providing facilities to the productive sector and facilitating it whenever possible.

7)- Inefficiency of monetary and fiscal policies:-

The stances of countries represented in monetary and fiscal policies towards managing inflation and limiting the aggravation of its rate are something that needs to be considered, as there are several monetary policy measures, for example, that affect the occurrence of inflation.

For example, the state represented by the Central Bank increases the money supply, which is printing more local banknotes, as a result of economic decisions that were not preceded by an adequate and accurate study to take such a measure, which leads to a rise in the general level of prices, and thus leads to inflation as a result of inefficiency Such actions by the state