In economics, inflation is a general increase of the prices of goods and services in an economy. This is usually measured using the 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 CPI 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. As prices faced by households do not all increase at the same rate, the consumer price index (CPI) is often used for this purpose. The employment cost index is also used for wages in the United States. There is disagreement among economists as to the causes of inflation. Low or moderate inflation is widely attributed to fluctuations in real demand for goods and services or changes in available supplies such as during scarcities. Moderate inflation affects economies in both positive and negative ways. The negative effects would include an increase in the opportunity cost of holding money...

Learn about the types of inflation, the history of inflation in the U.S., inflation's impact on interest rates and how to protect your business from the effects of inflation.

If it feels like your dollar doesn’t go quite as far as it used to, you aren’t imagining it. The reason is inflation, which describes the gradual rise in prices and slow decline in purchasing power of your money over time. Here’s how to understand inflation, plus a look at steps you can take to prot

In economics, deflation is a decrease in the general price level of goods and services. Deflation occurs when the inflation rate falls below 0% (a negative inflation rate). Inflation reduces the value of currency over time, but sudden deflation increases it. This allows more goods and services to be bought than before with the same amount of currency. Deflation is distinct from disinflation, a slow-down in the inflation rate, i.e., when inflation declines to a lower rate but is still positive.Economists generally believe that a sudden deflationary shock is a problem in a modern economy because it increases the real value of debt, especially if the deflation is unexpected. Deflation may also aggravate recessions and lead to a deflationary spiral.Some economists argue that prolonged deflationary periods are related to the underlying of technological progress in an economy, because as productivity increases (TFP), the cost of goods decreases.Deflation usually happens when supply is high (when excess production occurs), when demand is low (when consumption decreases), or when...

When prices go down, it’s generally considered a good thing—at least when it comes to your favorite shopping destinations. When prices go down across the entire economy, however, it’s called deflation, and that’s a whole other ballgame. Deflation is bad news for the economy and your money. Def

Gross domestic product (GDP) is a monetary measure of the market value of all the final goods and services produced in a specific time period by a country or countries. GDP is most often used by the government of a single country to measure its economic health. Due to its complex and subjective nature, this measure is often revised before being considered a reliable indicator.GDP definitions are maintained by several national and international economic organizations. The Organisation for Economic Co-operation and Development (OECD) defines GDP as "an aggregate measure of production equal to the sum of the gross values added of all resident and institutional units engaged in production and services (plus any taxes, and minus any subsidies, on products not included in the value of their outputs)". An IMF publication states that, "GDP measures the monetary value of final goods and services—that are bought by the final user—produced in a country in a given period (say a quarter or a year)."GDP (nominal) per capita does not, however, reflect differences in the cost of living and the inflation rates of the countries; therefore, using a basis of GDP per capita...

GDP is the value of all goods and services produced in a country – and one of the most closely watched economic indicators. Learn how to calculate GDP.