Methodological aspects of inflation management by example of Kazakhstan
Methodological aspects of inflation management by example of Kazakhstan

Summary/Abstract: Inflation is a well-known phenomenon of social and economic life, but so far it has not been sufficiently explained. This is explained by the complexity and diversity of the problem, as well as the fact that the content of inflation evolves in time and space, depending on specific economic and political conditions. Therefore, there have been attempts to reconsider the phenomenon of inflation theoretically. Since inflation is a «subject» of the economy, after determining the object under study within a proper framework, we have established the nature of the problem, as well as the ways and mechanisms for inflation management. The social conflict over the redistribution of social wealth has been highlighted as one of the root causes of the existence of inflation. At the same time there is a variety of factors determining the character of the flow of inflationary process that predetermines the need to examine the contents of inflation at the country level. According to this, an analysis of inflationary processes for the period of 1992-2014 was conducted in Kazakhstan, where a discrete model of the origin and development of inflation had been studied. Based on this model, a formula was derived connecting inflation, the growth rate of money supply and economic growth with regulatory aspects of the currency exchange rate. Inflation management involves the use of a set of measures helping to a certain extent combine price increases with the stabilization of revenues. At the heart of the proposed mechanisms of inflation management lies the factor-targeted approach which makes it possible to establish the relationship of anti-inflation, monetary and credit, fiscal and currency policies, to make projection of the inflation rate for the coming years taking into account the cyclical changes in prices by various factors.

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