The problem of sticky inflation in our country

One of the most significant obstacles facing our country's economy is sticky inflation, which has become structural and whose rise is permanent. Because our country cannot increase supply, inflation emerges even when demand slows down, because there is no production. The lack of production causes price imbalances. Inflation also brings with it a lack of confidence in the economy. The government, which cannot establish confidence in the economy, creates a chronic obstacle in solving economic problems by narrowing the space for monetary authority. This situation causes our country to become vulnerable to external and internal shocks.

In our country, the problem of sticky inflation, which has made its diseased structure felt along with the transition from an import-substitution planned economic approach to an outward-looking liberal economic approach, has made the national economy more fragile due to political uncertainties on one hand and the weaknesses of the financial infrastructure on the other. Although it is known that our country's economy is quite open to both internal and external shocks, the political power has made sticky inflation chronic by further weakening the economy's resilience to crises. Due to constant price shocks, it has become impossible for the economy to reach a stable structure due to inflation stickiness.

Inflation stickiness is important because it affects the political and economic costs of lowering inflation. In our country, inflation stickiness is high, while monetary policies are low, meaning they are ineffective, which leads to a constant worsening or deterioration in inflation expectations. This situation renders the implemented economic policies ineffective in the face of price shocks.

Our country has long been experiencing a horizontal problem regarding economic crises and wages, and a vertical problem regarding prices. Even if the economic management thinks it has achieved temporary success, the results have essentially been failures again. When they grasp this failure, inflation stickiness will be resolved. However, the government in economic management is experiencing a scarcity and poverty of intellect.

The political power and economic management remain reluctant and inadequate in finding scientifically acceptable solutions from political, economic, and social perspectives.

The political power is helpless and reluctant against rising price movements. All they do is constantly increase prices and taxes. This situation deepens the crisis further and increases poverty. This means that the government and economic management do not want prices to fall. If prices are falling, inflation is not being lowered consciously.

The phenomenon of price increases, referred to as inflation in our country, was essentially a temporary event. However, the government has made this temporary phenomenon permanent.

Our society cannot see structural inflation as a potential destroyer of our society; it does not strive to see this phenomenon as anything beyond a relationship between money and prices. Inflation is not just a price increase, but also a thief that imposes social, societal, and political decay. It takes all our values and destroys them.

If we cannot grasp that the continuation of this sticky inflation is a phenomenon that destroys modern societies, we will not know where to start to fight this problem effectively. The question of researching the social and political causes of sticky inflation, along with its economic causes, leads us to "uncharted territory." The political power and economic management have not yet grasped sticky inflation, which has become a chronic problem for our country. For this reason, they view it as a temporary inflation phenomenon. Therefore, using temporary inflation methods does not just invite failure; it has made the problem worse and the solution more difficult. Our people do not want to pay a higher price for the problem of sticky inflation. Unless the depth and scope of the problem are very well understood, the emergence of suitable political alternatives will be inevitable.