This can occur across any sector or throughout an entire economy. When inflation takes hold, the expectation of inflation itself can further sustain the devaluation of money. Workers may demand higher wages and businesses may charge higher prices, in anticipation of sustained inflation. This in turn reinforces the factors that push prices up.
What is inflation in economics?
What Is Inflation? Inflation is a gradual loss of purchasing power, reflected in a broad rise in prices for goods and services over time. The inflation rate is calculated as the average price increase of a basket of selected goods and services over one year.
What's happening with inflation?
Here’s a guide to understanding what’s happening with inflation and how to think about price gains when navigating this complicated moment in the U.S. and world economy. It can be helpful to think of the causes of today’s inflation as falling into three related buckets. Strong demand. Consumers are spending big.
