Soaring Prices in Texas: The Impact of Inflation on the Lone Star States Economy

Abstract

Inflation in Texas Introduction Inflation reflects the rates at which the prices of goods and services in an economy rise over some time. As a potential measure of the pricing dynamics, inflation allows an economy to understand whether the goods and services it offers have a positive or negative impact on its growth and development. According to (Antonakakis, Gupta & Tiwari (2017), when inflation is moderate, it becomes considered a sign of a healthy economy as demand for goods and services increases, thus defining economic growth. However, a high amount of inflation represents a sign of a bad economy as the demand for products and services lowers due to the decline of potential buyers; thus, suppliers try to deliver little stuff, which lowers the rate of money circulation affecting the economy negatively. To this effect, one can argue that the rise in prices due to an increase in production costs or a surge in demand for products and services serves as the main potentials factors that foster inflation in a great manner. Inflation becomes a topic of relevance in this essay as its rates determine the type of life that Texans experience and the nature of their economy as Texans have witnessed major differences in inflation between 1963 to date. According to the United States Bureau of [City, State]'s economy remains the second-largest by GDP in the United States, with a gross state product of over $1.887 trillion. Paying close attention to Dallas-Fort Worth, the UN Bureau of Standards confirmed that prices were 744.84% higher in 2021 compared with 1963, with a difference of $ 148.97 in value (Antonakakis, Gupta & Tiwari, 2017). The body further confirms that Dallas experienced an average inflation rate of 3.75% per year between 1963 and 2021. What do such inflation rates changes imply? Such changes imply that a product or service in Dallas that would have cost Texans within this region $20 in 1963 will cost them $168.97 at current (2021). The main reason that makes inflation a problem in Texas is that the prices of products and services have reported a significant rise making the lives of most Texans quite unbearable. According to Shapiro (2020), before the 2019 Covid-19 pandemic, Texans enjoyed a moderate amount of inflation, which positively impacted its economy and enhanced money circulation in a great way. The pandemic brought about low inflations in Texas from 4% in 2019 to 1.7% in 2020. During this period, Texas's economy did not register any growth or developments, which affected the living standards of its citizens in a great manner. However, to maintain the glory of California's second most developed economy in America, the inflation rate rose from 1.7% in December 2019 to over 4% by February 2021. The prices of products and services ever since February 2021 have been experiencing an increment which though stressing most Texans, seems to favor the Texas economy, which has reported a 20% growth improvement regardless of the Covid-19 blows (Shapiro, 2020). According to a report by Apergis and Apergis (2021), though stuff prices have increased and continued increasing in Texas, its economy continues registering some improvements attributed to robustly expanding payrolls led by hiring in the leisure and hospitality industry. However, it is imperative to note that retail employment has flattened, and real earning has declined due to supply bottlenecks driving inflation. To this effect, it remains clear that if the Texas government fails to employ the right interventions to address the inflation problem, then many Texans will continue enduring unbearable living conditions that might affect the Texas economy in the long run. Based on a report compiled by the Bureau of Labor Statistics, the indexes for food, shelter, and gasoline serve as...