What is 'Inflation'?

Inflation is the rate at which the general level of prices for goods and services is rising and, consequently, the purchasing power of currency is falling. ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌

Term of the Day | Words to Know Inflation Inflation is a quantitative measure of the rate at which the average price level of a basket of selected goods and services in an economy increases over some period of time. It is the rise in the general level of prices where a unit of currency effectively buys less than it did in prior periods. Often expressed as a percentage, inflation thus indicates a decrease in the purchasing power of a nation's currency. Inflation can be contrasted with deflation, which occurs when prices instead decline. Read More » Related to "Inflation" What Causes Inflation and Who Profits From it? In this article, we examine the fundamental factors behind inflation, different types of inflation, and who benefits from it. Read More » 9 Common Effects of Inflation Since investors haven't seen inflation or significant price rises in years, it's worth brushing up on the most common effects of inflation. Is inflation ever good? If you like your job it is. Read More » SPONSORED BY TIAA Annuities: Insurance for Retirement Annuities are financial products that pay out a fixed stream of payments. Find out more about annuities and how TIAA can help you create a secure retirement. Learn More » How to Profit From Inflation Inflation means consumer prices are rising but can also bring profit from the right investment choices. Read More » Podcast Alert: The Investopedia Express with Caleb Silver Get ready for the week ahead with Investopedia's Editor in Chief, Caleb Silver, as he digs into the most important stories in finance and global economics. Listen now on: Apple Podcasts » Spotify » Google Podcasts » Related Definitions Demand-Pull Inflation Demand-pull inflation is the upward pressure on prices that follows a shortage in supply. Economists call it "too many dollars chasing too few goods." Read More » Cost-Push Inflation Cost-push inflation occurs when overall prices rise (inflation) due to increases in production costs such as wages and raw materials. Read More » Purchasing Power Purchasing power is the value of a currency in terms of the goods or services that one unit of it can buy. Read More » Money Supply The money supply is the entire stock of currency and other liquid instruments in a country's economy as of a particular time. Read More » CONNECT WITH INVESTOPEDIA Email sent to: mondemand.forex@blogger.com To update your newsletter preferences or unsubscribe, click here. 114 West 41st St, floor 8 New York NY 10036 © 2020, Investopedia, LLC, All Rights Reserved | Privacy Policy