Incomes, prices and pourchasing power

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Would you like to earn more to be able to buy more? But to what extent does a higher income enable us to really increase our standard of living? Be careful not to fall into the trap of the money illusion!

Purchasing power is the amount of goods and services that can be bought with our income.

Increasing incomes therefore makes it possible to increase purchasing power. But beware that this is not necessarily enough, as changes in the general price levels must also be taken into account…

Let’s have a look, for example, at the growth in purchasing power between 1973 and 2008, when three periods unfolded in succession: a period of high inflation until 1984, followed by a period of disinflation until 1996 and finally a period of low inflation until 2008.

Which period coincided with a higher increase in purchasing power for French citizens? Let’s check with our "Price stability and purchasing power” challenge!

 

View the challenge!

 

Duration: 2’

Languages: French, English, Spanish

Who can play: everyone

Design: Banque de France / Cité de l’Économie

Production: Opixido


Published on 18 November 2020.