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Conceptually, inflation refers to the general trend of prices, not changes in any specific price. For example, if people choose to buy more cucumbers than tomatoes, cucumbers consequently become more expensive and tomatoes less expensive. These changes are not related to inflation; they reflect a shift in tastes.
Demand-pull inflation occurs when aggregate demand in an economy is more than aggregate supply. It involves inflation rising as real gross domestic product rises and unemployment falls, as the economy moves along the Phillips curve. This is commonly described as "too much money chasing too few goods ". [1]
Monetary policy is the policy adopted by the monetary authority of a nation to affect monetary and other financial conditions to accomplish broader objectives like high employment and price stability (normally interpreted as a low and stable rate of inflation). [1][2] Further purposes of a monetary policy may be to contribute to economic ...
A consumer price index (CPI) is a price index, the price of a weighted average market basket of consumer goods and services purchased by households. Changes in measured CPI track changes in prices over time. [1] The CPI is calculated by using a representative basket of goods and services. The basket is updated periodically to reflect changes in ...
History. The concept of core inflation as aggregate price growth excluding food and energy was introduced in a 1975 paper by Robert J. Gordon. [1] This is the definition of "core inflation" most used for political purposes. The core inflation model was subsequently developed and advocated by Otto Eckstein, in a paper published in 1981. [2]
v. t. e. The Phillips curve is an economic model, named after Bill Phillips, that correlates reduced unemployment with increasing wages in an economy. [1] While Phillips did not directly link employment and inflation, this was a trivial deduction from his statistical findings.
The United States Consumer Price Index (CPI) is a family of various consumer price indices published monthly by the United States Bureau of Labor Statistics (BLS). The most commonly used indices are the CPI-U and the CPI-W, though many alternative versions exist for different uses. For example, the CPI-U is the most popularly cited measure of ...
World map by inflation rate (consumer prices), 2023, according to World Bank This is the list of countries by inflation rate. The list includes sovereign states and self-governing dependent territories based upon the ISO standard ISO 3166-1. Inflation rate is defined as the annual percent change in consumer prices compared with the previous year's consumer prices. Inflation is a positive value ...