Inflation

Sustained rise in the general price level that erodes purchasing power, conventionally measured by a CPI.

Specifications & Metrics

type

Monetary economics

introduced

1911

originator

Irving Fisher

Core Principles & Analysis

• Fisher's quantity equation MV = PT, given standard form in The Purchasing Power of Money (1911), links money growth to prices.
• Monetarists treat sustained inflation as always and everywhere a monetary phenomenon, in Friedman's phrase.
• Unexpected inflation redistributes wealth from creditors to debtors by lowering real repayment burdens.

Sources

• Econlib Concise Encyclopedia of Economics: Inflation