What Is Inflation?
Have you ever been shopping and noticed that the prices of things you buy have gone up? If the same things in your shopping basket used to cost $40 and now they cost $50, at a very basic level, that's "inflation." More precisely, inflation is defined as ongoing increases in the overall price level.
Get started
- What is inflation?
- Why do prices change?
- Is every price increase inflation?
- How can we tell when inflation is happening?
Get technical
- How do you measure inflation?
- What are price indexes?
- What is "underlying" inflation and how is it measured?
- What are deflation, hyperinflation, and stagflation?
- What is the connection between the Phillips curve and inflation?
Why Should You Care about Inflation?
What would you do if the money in your wallet or bank account could buy less and less every week? Would you spend more time thinking about how to get the most out of your money while you could? Would you change what you bought or how much? Would you keep money in your savings account? Thinking more broadly, inflation affects everyone in the economy: workers, businesses, people on fixed incomes, lenders, and borrowers.
Get started
- What is inflation?
- Why do prices change?
- Is every price increase inflation?
- How can we tell when inflation is happening?
Get technical
- How do you measure inflation?
- What are price indexes?
- What is "underlying" inflation and how is it measured?
- What are deflation, hyperinflation, and stagflation?
- What is the connection between the Phillips curve and inflation?
