by Peilin Chen

Lebanon, a country in the Middle East flowing with rich cultures, history, and people, has been fighting a severe threat to their lifestyle and economy. But, strikingly, it’s not famine, land degradation, or even war. There, prices change constantly – some in the span of mere hours. Costs of food, electricity, and water have all skyrocketed, and people can barely afford their necessities [2]. However, while many remain ignorant of Lebanon’s grim state, it has become an issue close to home… Inflation.

Inflation is the average growth of prices which, according to the U.S. Bureau of Labor Statistics, has escalated by 6.4% in the past year [9]. While this may not seem consequential, the rise in inflation has triggered domino effects throughout the world of economics. Specifically, it has led to the erosion of purchasing power: the goods you are able to buy with a specific amount of money [7]. Looking back on the costs of eggs, which rose from two dollars to six dollars within a year, we discovered that more money is needed to buy the same goods whilst we can only buy fewer goods with the money available. This idea is the decrease in purchasing power, the loss in the value of money. We see a two-way effect: inflation impacts purchasing power as purchasing power fuels inflation. Since the dollar is less valuable, prices rise to compensate for it. The never-ending cycle can repeat itself as inflation grows, ultimately setting up the economy for a spiral of restlessness and confusion.

This situation is terrifying, especially for small business owners like my father. Our deli’s main source of income is dependent on making sandwiches, and my dad works long hours every day to ensure that we have stable earnings. Even in a small Philly deli store, however, inflation affects everyone. Our deli struggled to keep up, as we were required to raise our prices to accommodate the sudden increase in meat, produce, and paper. But, these extra costs deterred many of our customers from buying our hoagies because they weren’t “worth” spending more on. My dad was forced to take out small loans just to keep the store afloat, and it would have shut down if only a few more customers had stopped coming. Many small businesses face the same problem today. When faced with the excessive supply costs, they are forced to increase their prices as well. However, their customers will either stop buying these goods or turn to big corporations which offer lower prices and can swallow the effects of inflation [6]. It is not “Amazon” that is impacted… It is these everyday people whom inflation hurts the most.

Everything must originate from somewhere, and inflation is no exception. However, many argue about the exact cause of inflation. While there are various factors, the most apparent is the recent increase in the supply of money in existence [3]. Around the time COVID hit, there was a drastic drop in economic activity, with people staying home and businesses shutting down. The government needed to encourage consumers to start buying again. So, they printed more money and provided stimulus checks, decreasing interest rates to coax people into borrowing and spending [1, 8]. “The Federal Reserve had printed astronomically higher, and disproportional amounts of money [in 2020] in ways, unlike any other time in history,” stated Matthew Gilmore in Data Driven Investor [5]. Despite more money circulating the system, it isn’t a “quick fix,” as some believe. With this sudden overflow, the value of our own money immediately decreases, and prices rise to compensate for it, further referencing the erosion of purchasing power.

On top of the pandemic, the war between Ukraine and Russia has caused a humanitarian and economic crisis. Throughout the war, the United States has supported Ukraine’s position, but doing so created a rift between the U.S. and Russia. In the past, Russia had been one of the primary producers of oil and gas in the world. To penalize Russia’s role in the war, the U.S. banned all imports of oil, coal, and natural gas from Russia. This move, however, resulted in a sparse supply of gasoline. The demand for gas increased, resulting in the prices increasing [4], Additionally, since many people need to spend more on gas, they end up holding out on going out to buy goods, resorting to online websites. Again, this hurts small businesses that are unable to expand their resources to the internet.

After witnessing our society slowly succumb to the effects of inflation, we return to the beginning. This issue is vastly different from the other problems in society, but its impact can be worse if we let it accumulate. From the decrease in purchasing power and inflation growth to the damage inflicted on our community, the ties holding the country together have fallen apart. As inflation spreads, we begin to ask the question: Will we be the next Lebanon?

[1] Davis, Antony. Why the US doesn’t want inflation, explained. 2021. YouTube,

[2] Derhally, Massoud A. “Lebanon inflation soared 124% in January as economic crisis continued.” The National, 22 February 2023,

[3] Fernado, Jason, et al. “Inflation: What It Is, How It Can Be Controlled, and Extreme Examples.” Investopedia, Investopedia, 12 March 2023,

[4] GEP. “Russia-Ukraine War’s Effects on the Oil and Gas Industry.” GEP, 5 July 2022,

[5] Gilmore, Matthew. “The most important money graph of all time, by the Federal Reserve.” DataDrivenInvestor, 2021,

[6] Lynch, Ryan. “How Inflation Affects Small Businesses.” American Express, 7 November 2022,

[7] McKinsey & Company. “What is inflation: The causes and impact.” McKinsey, 17 August 2022,

[8] Schrotenboer, Brent. “Coronavirus and the economy: How the Fed is ‘printing’ dollars.” USA Today, 12 May 2020,

[9] U.S. Bureau of Labor Statistics. “CPI Home : U.S.” Bureau of Labor Statistics, 2023,