What is inflation?

#Inflation is a rise in prices across the economy over time.

It makes the #purchasing-power erode across the entire economy over time.

Gradual, low and stable inflation is okay - they want predictable prices so they can #plan.

#Hyperinflation is inflation out of control where a unit of #currency destroys itself to tens of orders of magnitude.

Central banks do everything they can to avoid hyperinflation:

• banks, retirement funds etc become worthless

#Deflation sounds good but wages fall, so everything becomes more expensive.

Prices stay the same but you purchasing power is eroded just the same.

You can go back to the [[Economics main page]]