what according to you are the main causes of the present state of inflation in the country?

The economy of Bangladesh has been suffering from a double-digit inflation. A shortage of oil production or energy crisis world-wide, increase in energy prices and cost-of production in combination with a demand-pull inflation from expansionary economic policies have caused a persistent inflation. Altogether these have created a supply-side problem by decreasing the productivity. The situation of Bangladesh has been aggravated due to political problems and effort of minimizing corruption and a lack of confidence in business and manufacturing. It is hard to assume that we can ever get back to the single digit inflation. It is almost clear that we have to live with this double-digit inflation.

The natural rate of inflation from four to five percent is accepted in almost any developing country. But, a double-digit inflation of more than ten percent must have some reasons. Inflation is the persistent and generalized increase in the level of prices of goods and services. Consumers are worried about higher or increasing prices of their consumer goods as their real income, purchasing power and their standard of living is going down.

Inflation is normally caused by a combined effect of demand-pull, cost-push, and expansionary monetary or fiscal policy. The recent inflation in Bangladesh is relatively more a cost-push inflation than a demand-pull. Rising prices of goods of all kinds including the goods of necessities is mere a reflection of the rising cost of production than a higher demand for these goods and commodities.

Productivity, or output per labor, is not increasing as much as their wages are increasing. Factors of production and their productivity in our economy of recession including land, labor, capital, technology, innovation and management are not increasing due to land erosion and land fragmentation, lack of training, wear and tear of capital equipment, and their lack of replacement, backwardness of technology and innovation. The lack of skilled manpower, leadership, smart management and productive working environment and discipline is common in Bangladesh. The higher import prices of raw-materials, energies, fuel and intermediate goods are also increasing the cost of production.

Wages in the major employment - or the public sector in Bangladesh has been increasing for more than the last two decades due to both strong and moderately strong labor union. Due to political, social and cultural tradition and for a humanitarian reason,. Finally, we have the nationwide increase in wages relative to the productivity or output per labor. Higher wage is easily transferred to higher cost of production and higher prices of consumer goods. Increased wages lead to the rising inflation.

is high per capital income the only measure of economic development?

 Actually the high per capital income is not the only measure of economic development.

 

There are a number of measures which have been used to estimate the economic development of a country. These measures, in brief, are:

(i)  Increase in real GNP.

(ii)  Increase in real per capita income.

(iii)  Rise in overall wellb eing of the people. (iv)   Basic needs approach.

(v)    Human Development index.

How does an imperfect market affect the interest of an average consumer

 A market where information is not quickly disclosed to all participants in it and where the matching of buyers and sellers isn't immediate. Generally speaking, it is any market that does not adhere rigidly to perfect information flow and provide instantly available buyers and sellers.

 Imperfect market structure is where the firms that operate in a market have a lot of control over the good or service they produce. This will happen when the numbers of firms that produce that good or supply a certain services are very few in the market. Imperfect competition market structure is the most common type of market structure in the market.   We can illustrate imperfect competition by an example in the energy sector. If there is only one gas station in your geographical area and you cannot

afford to go and buy fuel from the neighboring gas station because of its distance and costs. Then your local gas station will price its commodity above the prevailing market prices because there is no competition from other firm. The consumers do not have any choice but to purchase from this station at the inflated prices. The gas station has therefore created an imperfect market.

 The characteristic of imperfect market structure is that they reduce the economic surplus to varying degrees. Economic surplus is the extra revenue you acquire from selling a commodity at a higher price more than what you were willing to sell in the market. There are five major sources of market power in the imperfect market competition. There are

 •                    Exclusive control of the factors of production

•                    Having the patent right or copy rights in the production of a good or service

•                    Government regulation

•                    Firms network in a market to create economies of scales.

•                    Natural monopolies

As a result the average consumer will be faced problem to achieve their desired interested product.