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Cost of Living - Coggle Diagram
Cost of Living
Inequality of inflation
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Inequality in consequences of strategies used to deal with inflation e.g interest rates causing deindustrialisation
How inflation?
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What causes less demand?
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Lockdown lifted = lots of money to spend and more willing to spend it after being unable to previously
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Supply side:
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Excuseflation
So many external shocks allow firms to move prices even when they don't need to, justified by public narratives (Weber 2023) profit led inflation
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Inflation
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Measure of increase of general price level in the economy (OSN) who collect prices on over 700 items
Been relatively low, last spike was in 1990s
Inflation is chage in prices rather than cost of things so inflation cna slow but cost of living sitll a problem
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Deal with inflation?
Increase interest rates
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Harm green transition as borrowing/investing less attractive which we need for green transition E.G researching adapting potato to different climatic environments (Tang 2024)
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Fiscal policy
Deal with shockflation
Introduce buffer stocks for essential to stabilise prices in period of shockflation e.g strategic petroleum reserve in US states
Taxes on excess profits deemed unearned as it was due to companies increases prices due to shocks such as war
Climateflation give tax breaks or subsidies to sustainable investment e.g clean energy intended to increase energy security
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Jan 2026, 88% reported cost of living as an important issue (ONS) Ahead of NHS at 82, the economy at 69 Housing at 54
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