Inflation

Inflation is a rise in the general level of prices over time. It may also refer to a rise in the prices of a specific set of goods or services. Inflation is measured by calculating the percentage rate of change of a price index, which is called the inflation rate.

This rate can be calculated for many different price indices, including: consumer price indices, cost-of-living indices, producer price indices, capital goods indices, etc.

There are different schools of thought as to what causes inflation. Many economists see moderate inflation as a benefit. However, high or unpredictable inflation rates are regarded as bad.