What is Inflation?

A  simple commonly used definition of the word inflation is simply "an increase in the price you pay for goods." 

In other words, a decline in the purchasing power of your money".

Technically, Price Inflation is when prices get higher or it takes more money to buy the same item.

Monetary Inflation is an increase in the money supply.  See How does the Money Supply affect our Inflation Rate?

Inflation is measured by the Bureau of Labor Statistics in the United States using the Consumer Price Index. See What is the Difference between Inflation and the Consumer Price Index?

However, it appears that the meaning of the word inflation has changed over time.  See our article, "What is the Real definition of Inflation?" for a more detailed discussion of how the definition has changed and what that actually means to you the consumer.

Other articles you might find helpful:

• Inflation Adjusted Oil Prices (Chart)
• Inflation Adjusted Oil Prices (table)
• Which is Better High or Low Inflation?
• What is the Difference between Inflation and the Consumer Price Index?

Subscribe to our FREE monthly E-zine 
and we will keep you up-to-date on what is happening in the area of inflation, interest rates and market trends.

Quick Links

• Inflation Calculator