BNET Business Dictionary
Business Definition for: Inflation
- a sustained increase in a country's general level of prices that devalues its currency, often caused by excess demand in the economy
Wiktionary Definition for: Inflation
- #An act, instance of, or state of expansion or increase in size, especially by injection of a gas.
- Ex: ''The '''inflation''' of the balloon took five hours.''
- Expansion in the money supply beyond the increase in available goods and services. Often misunderstood to mean a rise in prices, which generally accompanies such an expansion.
- Ex: ''The low level of the Federal Reserve Rate caused a great '''inflation''' in the money supply that year, accompanied soon after by a general rise in prices.''
Additional Resources
- TIPS for Inflation: August 2009 Mutual Fund Focus
- News and analysis from Standard & Poor's MarketScope AdvisorLike income taxes, junk mail, health care reform, and Barry Manilow, some things just don't go away. For investors, inflation is the guest that won't leave, reappearing unexpectedly from some hidden recess at the most inconvenient moment.As it turns out, Wall Street...
- News items 2009-08-25
- A Field Guide to Inflation: Lessons from the 1970s, Vol. 1
- Economists are divided on the threat from a revival of inflation -- rising prices caused by the enormous stimulus being force-fed to the U.S. economy. Some are more worried about deflation and call for more stimulus in a hurry; others want to stop the stimulus before it creates its own...
- Blog posts 2009-05-20
- We Need Inflation to Spur a Recovery
- Lee Ohanian makes a very persuasive argument that zero percent inflation does not harm an economy. Sometimes that's true, but I don't think it's the case this time. Because we are all consumers, we naturally think lower prices are good. Yet the U.S. just experienced the lowest...
- Blog posts 2009-07-02
- No, Inflation Is Not the Key to This Recovery
- Scott Sumner is a leading advocate of having the Fed increase inflation from its current rate of about zero to two percent. He forcefully argues that if this could be achieved, then our economy would improve substantially. But in my view, a small increase in inflation wouldn't improve economic performance...
- Blog posts 2009-07-02
- Deflation is Our Biggest Worry -- Not Inflation
- Many economists are worried about high inflation over the next few years. This is based on a misdiagnosis of the current economic crisis. Although the recession officially began in December 2007, until last August the damage was mostly confined to housing and finance. In August 2008, the recession spread to...
- Blog posts 2009-06-26
- Fed Policy On Inflation: As Good as It Gets
- Scott Sumner argues that the Federal Reserve erred in not expanding the money supply even more than it did last fall, and that monetary policy caused the financial crisis to worsen and our economic crisis to deepen. He suggests that a two percent inflation rate would be superior to the current...
- Blog posts 2009-07-01
- The Fed Fears Deflation More Than Inflation
- In his interesting post, Scott Sumner argues that deflation is more likely than inflation, and that if it occurred, it would damage the economy by effectively raising labor costs to firms, forcing them to lay off more people and worsening our unemployment problems. In contrast, I view deflation as less...
- Blog posts 2009-06-29
- What Causes Inflation? Lessons from the 1970s, Vol. 3
- The definition of inflation in your first economics course is simple: "Too much money chasing too few goods." You might restate it as "an increasing amount of money chasing a fixed amount of goods," but the point is that when the quantity of money in an economy is increasing faster...
- Blog posts 2009-05-26
- Does Inflation Uncertainty Vary with the Level of Inflation?
- The purpose of this study is to test the hypothesis that inflation uncertainty increases at higher levels of inflation. Our analysis is based on the generalized autoregressive conditional heteroscedasticity GARCH class of models, which allow the conditional variance of the error term to be time-varying. Since this variance is a...
- White papers 1996-08-01
- Inflation's Social and Political Costs: Lessons from the 1970s, vol. 2
- In addition to the primary and secondary economic costs that come with high inflation, which we considered yesterday, there's a third level of effects -- social and political -- that comes with chronic rising prices. To generalize, I believe that high inflation hurts poor people more than rich people, political...
- Blog posts 2009-05-21
- Investors weigh risks of inflation and deflation
- Rising gold prices and falling government bond yields reflect investors' uncertainty over whether inflation or deflation is the threat to fear for price stability. This week's data should provide fuel for both sides of that debate. UK inflation data for September, due out tomorrow, should show a headline consumer prices...
- News items 2009-10-11
- Investors weigh risks of inflation and deflation
- Rising gold prices and falling government bond yields reflect investors' uncertainty over whether inflation or deflation is the threat to fear for price stability. This week's data should provide fuel for both sides of that debate.UK inflation data for September, due out tomorrow, should show a headline consumer prices...
- News items 2009-10-11
- Inflation-Linked Bonds
- An inflation-linked bond is a bond that provides protection against inflation. Most inflation-linked bonds, the Canadian "Real Return Bond "RRB and the new U.S. Treasury inflation-protected security IPS are principal indexed. This means their principal is increased by the change in inflation over a period. In most countries, the Consumer...
- White papers
- Inflation And Its Impact On Investments
- "Understanding inflation is crucial to investing because inflation can reduce the value of investment returns. Inflation affects all aspects of the economy, from consumer spending, business investment, and employment rates, to government programs, tax policies, and interest rates. This article explains the basics: What is Inflation? What Causes Inflation?...
- White papers 2003-07-01
- Is Hyper-Inflation In Our Future?
- Each week on my Sunday morning radio show, I get asked the same question about hyper-inflation: Is the massive amount of government spending going to cause it? If you're living on fixed-income securities, as so many seniors are, hyper-inflation is terrifying - everything will cost a lot...
- Blog posts 2009-06-02
- Consumer Inflation Expectations 'flat'
- Consumer expectations of inflation were flat for the second straight month in October, after signs of an economic recovery failed to stoke fears of rising prices.The Melbourne Institute MI survey of consumer inflationary expectations was unchanged in October at 3.5 per cent, matching its September and August result.The share...
- News items 2009-10-15
- Euro Zone Inflation Seen Negative Again
- LONDON (Reuters UK) - Euro zone inflation remained negative for the fifth month in a row in October on the back of falling energy and food prices, preliminary numbers are expected to show next week.Another month of falling prices on a year ago will give scant reason for the European...
- News items 2009-10-26
- A Measure of Underlying Inflation in the United States
- In this paper, a measure of underlying inflation in the United States is obtained using a structural vector autoregressive SVAR methodology. The assumption that movements in measured inflation are the result of a one-time shocks to prices arising from supply-side developments and b persistent shocks to the inflation rate arising...
- White papers 1997-09-01
- Why Core Inflation?
- Mark Thoma submits: There is a lot of confusion over the Fed's use of core inflation as part of its policy making process. One reason for confusion is that we are using a single measure to summarize three different definitions of the term "core inflation" based upon how it...
- External links 2008-08-28
- Inflation-Deflation: Macroeconomist Smackdown
- Of all the different vital signs for the U.S. economy, the measure that's drawn the most attention has been the rising unemployment rate. Inflation hasn't been as newsy, because prices have been pretty tame. But the long-term picture for prices is still unclear, and there's a hot debate among economists...
- Blog posts 2009-05-11
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