Just thinking rationally but knowing nothing factual, it seems to me that crime, particularly petty crimes, would increase in tough economic times, since the poor bear the burden most as things get more expensive while poor people’s wages remain constant or decrease. It’s logical that desperate times create desperate measures, and that the number of crimes committed merely to survive would increase as survival becomes more difficult. But is there any demonstrable correlation between the two?
Tough times generally means higher unemployment. High inflation can occur during good times, or at least times where it’s easy to get a job. There’s also the concept of stagflation, where higher unemployment and higher inflation occur simultaneously.
High unemployment is correlated with a range of social ills. That said, I understand (from 2 cites) that variation in unemployment is not the main driver of crime, though eg poverty and early childhood lead poisoning are significant factors. To be sure, after controlling for a large number of factors Raphael and Winter-Ebner (2001) report that unemployment leads to property crime and male unemployment is possibly related to rape. Relationships with other types of crime are more difficult to tease out. That’s from the abstract: I’m keeping things a little vague because I haven’t read the article.
Inflation is an umbrella term for a lot of different things. You might think of it like how a cough indicates some peculiarity in our bodies, but doesn’t strictly identify the underlying illness (could be a cold, could be pneumonia, could be that you just jogged a few miles - which is good for you). Lots of different things can cause it and the future course is going to depend more on the cause than the cough itself.
Case 1
If you raise the minimum wage, for example, that raises the cost of labor for anything done inside the United States. Some business owners may attempt to keep their prices at pre-inflationary rates by cutting profits, reducing their own salary, etc. But, in general, they’ll pass the wage hike onto the customer. Starbucks coffees and anything American Made become more expensive, but the people buying the stuff also become a bit wealthier. Their wage and the cost of American made grow in tandem, but imported products stay at the same price, so - effectively - they become cheaper.
That said, American-made products - having gone up in price - lose ground abroad, sales go down, and some of those businesses will either fold, offshore, or perform layoffs. In general, you’ll see a rise in unemployment, and that will almost certainly lead to greater rates of crime and violence.
Case 2
Printing money and mailing it out to people - also known as quantitative easing - can act as a medicine or a poison, depending on the dosage and the economic situation.
If we imagine, for example, that a lot of people have lost their job and are still on the hook for their rent then their likelihood of being able to find a new job drops if they lose housing. Printing off all the bucks, potentially, allows us to reduce the total amount of unemployment and thus prevent crime and violence. It does cause an amount of inflation, though, since prices will respond to the presence of excess money and go up to swallow it all up.
Case 3
More similar to the first case is the result of tariffs.
You establish a tax on imported products. This raises the cost for the companies importing those goods, so they pass it on to the consumer. However, in this example, the consumer doesn’t gain a wage hike to help them get over the hump.
This highly incentivizes them to organize and push for their bosses to raise wages. Like before, the bosses will either raise the wages or offshore. If they do raise the wages then they need to raise their prices a second time - once for the import prices and a second time for wage hikes - and so their customer base drops and, again, they either need to downsize or offshore.
In either case, this is all fairly likely to lead to increased unemployment and violence.
Economists generally advise against tariffs.
I take issue with @Sage_Rat’s characterization
Wiki, emphasis added: “In economics, inflation is a general increase in the prices of goods and services in an economy.”
So if oil or egg prices increase, that’s not inflation per se. Inflation refers to a basket of goods and services. Generally speaking healthy economies don’t have zero inflation, as measured on an annual basis. If prices are declining, the term for that is deflation. The public doesn’t like accelerating inflation, when the rate of change of prices is itself increasing.
Sage discusses various policies and some of their effects, but inflation and deflation have pretty clear meanings.
I don’t disagree. I guess I was alluding to the popular conception of it, which is rather amorphous and disconnected from the economic meaning - which is quite precise and limited.
The popular conception is problematic because it’s often just used to mean price changes due to market forces, not the general decrease in the value of money that actually characterizes inflation.
I suspect but don’t know, that the price changes are more of a symptom than a cause- prices rise because money is devalued, and not the other way around.
Sometimes prices rise because the money has been devalued. This can happen due to quantitative easing, but also just people taking out loans to invest in their future, and then taking out a second loan using the assets they got from the previous loan as collateral, as nauseum.
Other times, prices rise because products have become scarce (e.g. peak oil) or they’ve otherwise been limited (quotas, taxation, etc.).
As said, “inflation” is a fairly small and tightly defined term in economics. How people use it is fairly disconnected from how it should be used or interpreted, mentally.
What causes inflation is a more complicated question than what is inflation. The study about how whole economies behave (eg the United States, Brazil, Germany, Luxembourg, etc.) is called macroeconomics. It is contrasted with microeconomics, the study of specific markets such as the market for oil, tuna, light bulbs, or automobiles). Note that individual markets such as oil can be larger than whole economies, so the nomenclature isn’t ideal.
I’m not all that thrilled with the money-devalued explanation for inflation, but that’s grist for another thread. Here’s an explainer on causes of inflation, courtesy of the Central Bank of Australia: Causes of Inflation | Explainer | Education | RBA
I don’t doubt that’s true, but I struggle to find ways to confirm that. My take is that pundit usage of the word inflation is generally accurate. They may maliciously misreport the level or extent of excess inflation in the economy, but that’s something else. At any rate, casual use of technical terms that the speaker doesn’t understand is not uncommon. I do this with physics terms.