What is Inflation and Should You Be Worried?

Inflation is the decrease in purchasing power—or value—of money.

The exact mechanisms of inflation can be confusing, and there's frequent debate about how it really works. Let's discuss three popular mechanisms for explaining inflation.

Demand-Pull Inflation

Occurs when the rise in demand for goods and services is greater than the rise in the supply of those goods and services.

Cost-Push Inflation

Increasing costs of production force producers to increase their prices, regardless of the consumers’ demand.

Built-In Inflation

Built-in inflation—is more about expectations than reality.

SWIPE UP TO READ MORE!