Why Prices Rise: Understanding Inflation and Stagflation

Miacademy & MiaPrep Learning Channel

This educational video provides a comprehensive introduction to the economic concept of inflation. Using relatable examples like the rising cost of muffins and local services, the host explains the definition of inflation as a sustained increase in prices and a decrease in purchasing power. The video breaks down the two primary causes of inflation: rising production costs (cost-push) and increasing demand (demand-pull), detailing how factors of production like labor, natural resources, and global supply chains contribute to these shifts. The content moves beyond basic definitions to explore the nuances of economic health, discussing the relationship between wages and inflation rates. It examines how inflation impacts different demographics depending on whether price hikes affect staple foods or luxury goods. The video also introduces extreme economic scenarios, including hyperinflation (using post-WWI Germany as a case study) and stagflation (illustrated by the 1970s US oil embargo), explaining why the latter is particularly difficult for policymakers to solve. For educators, this video serves as an excellent foundational resource for economics and financial literacy units. It employs clear graphics, supply and demand curves, and interactive "check-in" questions that prompt critical thinking. Teachers can use this video to explain why prices change, how to interpret economic news, and to introduce complex concepts like market equilibrium and the trade-offs involved in economic policy-making.