Theoretical and Applied Economics (Dec 2021)
The evolution of consumer prices – the main brake on economic growth
Abstract
The current period, subject to the pandemic and economic and financial crisis, requires an increased focus on price analysis, in both ways, the calculation of inflation based on the consumer price index, but also the calculation of the harmonized index of consumer prices. The latter is an indicator of inflation used by the Member States of the European Union. The economic and financial crisis is hitting hard in the economy of all countries. Therefore, in some circumstances the error is made to express an insufficiently analysed correlation, of the correlation between the increase of inflation on the one hand and the increase of the Gross Domestic Product on the other hand. In terms of current prices, this indicator is based on reality, but from the point of view of the real indicator, Deflated Gross Domestic Product, the situation is not exactly like that. Therefore, in this article we have sought, based on the data we have, to identify and suggest elements that are important in terms of price developments in the national economy of Romania. As a methodology, we focused, using the data provided by the National Institute of Statistics and Eurostat, to use this data to calculate a series of indicators and parameters, which suggest the trend of inflation and, consequently, the effect that this inflation will have an impact on economic growth. We also used a number of elements of inductive and deductive analysis to highlight those elements that make sense in this approach that we have taken in order to determine the influence that the loss of control of consumer prices is an element particularly serious in terms of economic growth.
