inflation (redirected from Inflation (economics))

Inflation

The rate at which the general level of prices for goods and services is rising, and, subsequently, purchasing power is falling.

Notes:

As inflation rises, every dollar will buy a smaller percentage of a good. For example, if the inflation rate is 2%, then a $1 pack of gum will cost $1.02 in a year.

Most countries' central banks will try to sustain an inflation rate of between 2-3%.

See also: CPI, Deflation, Disinflation, Fed, Hyperinflation, Inflation-Indexed Security, Inflationary Psychology, PPI, Reflation, RPI, Stagflation, Stagnation, Treasury Inflation Protected Securities (TIPS)

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Inflation

The rate at which the general level of prices for goods and services is rising.

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inflation

A general increase in the price level of goods and services. Unexpected inflation tends to be detrimental to security prices, primarily because it forces interest rates higher. A point to keep in mind is that a certain amount of inflation is already embodied in security prices. Compare deflation. See also consumer price index (CPI), core inflation, cost-push inflation, demand-pull inflation, GDP deflator, producer price index, purchasing power risk.