inflation
Sign in to savethumb|upright=1.6|Global rates of inflation in October 2025 among International Monetary Fund members thumb|upright=1.6|UK and US monthly inflation rates from January 1989
AI overview
Inflation is the rate at which the general level of prices for goods and services rises over time, reducing the purchasing power of money. It matters because it affects how much your money can buy—when inflation is high, the same amount of money buys you less than it did before.
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Article
41 sectionsContents
- Terminology
- Classical economics
- Related concepts
- History
- Overview
- Ancient Europe
- Ancient China
- Medieval Egypt
- Medieval age and "price revolution" in Western Europe
- After 1700
- Measures
- Issues in measuring
- Official vs. true vs. perceived inflation
- Inflation expectations
- Causes
- Historical approaches
- Before 1936
- Keynes and the early Keynesians
- Monetarism
- Rational expectations theory
- New Keynesians
- View post-2000 to present
- 2021–2023 inflation surge
- Heterodox views
- Government debt
- Effects of inflation
- General effect
- Negative
- Positive
- Cost-of-living allowance
- Control of inflation
- Historical approaches to inflation control
- Fixed exchange rates
- Gold standard
- Demurrage currency
- Wage and price controls
- Inflation targeting
- See also
- References
- Further reading
- External links
thumb|upright=1.6|Global rates of inflation in October 2025 among International Monetary Fund members thumb|upright=1.6|UK and US monthly inflation rates from January 1989
In economics, inflation is an increase in the average price of goods and services in terms of money. This increase is measured using a price index, typically a consumer price index (CPI). When the general price level rises, each unit of currency buys fewer goods and services; consequently, inflation corresponds to a reduction in the purchasing power of money. The opposite of inflation is deflation, a decrease in the general price level of goods and services. The common measure of inflation is the inflation rate, the annualized percentage change in a general price index.