This animated video clip explains inflation quickly and concisely. It also shows the problems and dangers of high and unpredictable inflation.
Duration: 1min 50s
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The two protagonists arrive at a market in the Middle Ages. They are hungry and decide to buy one of the cakes on offer. But as soon as they start looking at the cakes displayed, the baker increases the prices. The baker reasons that the people have more money to spend than there are goods available to buy, which is why demand is rising. He lists the resources he needs to make his products – he says all of them have become more expensive, hence the increase in the price of the cakes.
Inflation appears in form of a monster and gifts the protagonists money. But even though they have more money now, it’s not enough: The baker has already put his prices up again. Despite being exposed by the main characters, the inflation monster throws around even more money. Why is that bad? ‘If there’s too much money around for the same number of products, it pushes up prices and money loses its value,’ says the protagonist.
An older lady joins the main characters and shares her struggles: Fish, for example, has become so expensive, she can barely afford to buy it anymore. The woman explains that although the prices are constantly rising, her pension stays the same. And her savings are continually losing value as well. Before the inflation monster can attack again, the protagonists flee.
