What Is Inflation

Inflation is a sustained increase in the average price level of goods and services in an economy over time. The GDP deflator measures the change in prices of all goods and services produced within an economy. The Producer Price Index (PPI) measures the change in prices of goods and services at the production level. High inflation can erode the purchasing power of consumers. Low inflation can lead to deflation. The history of inflation dates back to ancient times. The International Monetary Fund (IMF) is working to address the issue of inflation. The World Bank and the Organisation for Economic Co-operation and Development (OECD) monitor the impact of inflation on the global economy. The future outlook for inflation is uncertain.