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Economy of Palakkad

2023-10-06T15:20:28Z

RoscoeChristy0:

The presence of [[Palakkad Gap]] and proximity to [[Coimbatore]] makes the city of [[Palakkad]] economically important. Palakkad is the second largest industrial hub in the Indian state of [[Kerala]], after [[Kochi]].<ref name=":0">{{Cite news |url=https://timesofindia.indiatimes.com/city/kochi/kanjikode-becoming-a-medical-oxygen-hub/articleshow/82280476.cms |title=Kerala: Kanjikode becoming a medical oxygen hub|date=28 April 2021|newspaper=Times of India}}</ref> Before becoming industrially important, business and commerce were the main kinds of engagement in the city.

==Commerce==
Palakkad was declared a city in 1866 by the governor of Madras. Before establishing itself, Palakkad had greater roots in commercialization. There are specialised streets for different amenities. Market Road is one of the main roads dedicated to trade and business. It was the major commercial area that belonged to the Palakkattussery Kingdom.<ref>{{Cite web |last=Palakkadwalks |date=2011-11-13 |title=PALAKKADWALKS: "Wonder City Of Palakkad" |url=http://palakkadwalks.blogspot.com/2011/11/wonder-city-of-palakkad.html |access-date=2023-10-02 |website=PALAKKADWALKS}}</ref> At present, the commercialization of the city is picking up, and the suburbs are witnessing growth.

[[File:Valiyangadi Market, Palakkad.jpg|thumb|Market Road]]
[[File:Joby's Mall.jpg|thumb|Joby's Mall, first mall in Palakkad]]

==Telecommunication==
[[British Physical Laboratories]] (BPL) was established in 1963 in the city. It had operational manufacturing units for laboratory equipment and telecommunication equipment. [[Indian Telephone Industries Limited]] opened its fifth plant in Kanjikode in 1956, responsible for data handling with the assembly and personalisation of smart cards and electronic manufacturing facilities for PCB's, HDPE pipes, smart energy metres, micro PCs under the Smart City Mission, etc. It also produces information and communication technology (ICT) equipment such as network management systems, encryption and networking for internet connectivity, secure communications networks, and defence equipment.

==Manufacturing==
One of the major control valve manufacturers under the Ministry of Heavy Industries, Instrumentation Limited has its unit, started in 1974 in collaboration with M/s Yamatake Honeywell co.Ltd., Japan, the world renowned leader in process control instrumentation including final control elements like control valves and plays a vital support role for a very wide spectrum of industrial enterprises – ranging from core sector establishments such as steel, power, cement and oil refineries to large medium and even small scale industries.<ref>{{Cite web |title=Instrumentation Limited, Palakkad, Kerala, India - Manufacturers and exporters of control, butterfly, globe, safety relief, bellows sealed, engineering, angle, high pressure valves and actuator, instrumentation, transmitter, desuper heater, power cylinder, orifice, cavitation and positioner |url=https://ilpgt.com/#:~:text=Instrumentation%20Limited,%20Palakkad%20(ILP),elements%20like%20control%20valves%20etc. |access-date=2023-10-02 |website=ilpgt.com}}</ref><ref>{{Cite news |last=Bureau |first=The Hindu |date=2023-09-16 |title=Union Minister lauds 4 CPSEs for their role in Chandrayaan-3 success |language=en-IN |work=The Hindu |url=https://www.thehindu.com/news/national/kerala/union-minister-lauds-4-cpses-for-their-role-in-chandrayaan-3-success/article67315763.ece |access-date=2023-10-02 |issn=0971-751X}}</ref>

Fluid Control Research Institute is also an institute under the same ministry dedicated to Fluids Engineering in South East Asia for R&D on flow products, Testing and Calibration of Valves, flow meters and other measuring instruments as per ISO requirements, model approval Tests, software for design and selection of flow meters/valves and specialised training programmes and more on the various facilities viz., Water flow Lab, Air Flow Lab, Oil Flow Laboratory and other auxiliary laboratories.<ref>{{Cite web |title=Fluid Control Research Institute - |url=https://www.fcriindia.com/ |access-date=2023-10-02 |website=FCRI India |language=en-US}}</ref>

==Heavy Vehicle==
[[Bharat Earth Movers Limited]] (BEML), a company supplying products, services, and support to defence and aerospace, mining and construction, and rail and metro for clientele within India and around the globe, is the second-largest manufacturer of earthmoving equipment. Its fourth complex is here.<ref>{{Cite news |date=2023-05-21 |title=Vande Bharat coaches likely to be made at BEML Kanjikode |work=The Times of India |url=https://timesofindia.indiatimes.com/city/kochi/vande-bharat-coaches-likely-to-be-made-at-beml-kanjikode/articleshow/100390288.cms?from=mdr |access-date=2023-10-02 |issn=0971-8257}}</ref> The plant was set up to cater to the requirements of the Defence Ministry and Indian Railways.Since inauguration the Palakkad complex has supplied 150 Rail coach Shells and Bogie Frames and 500 HMV Trucks.<ref>{{Cite web |last=https://www.bemlindia.in/portfolio/beml-palakkad-complex/ |title= |url=}}</ref>

==Oxygen==
Inox Air Products has its plant here, which is the sole producer of liquid oxygen and the biggest producer of oxygen in Kerala. It produces 149 tonnes of medical oxygen daily and has a storage capacity of 1,000 ns. Sri Venkateswara Oxygen Pvt. Ltd. is another one that meets the 80% requirement of industrial oxygen in the state and also produces medical oxygen cylinders for hospital purposes.<ref name=":0" />

==Petroleum==
Bottling plant of Hindustan Petroleum Corporation Limited (HPCL) is located in Kanjikode.<ref>{{Cite web |title=BPCL's LPG pipeline project in Kerala back on track; to be commissioned upto Palakkad in April 2020 |url=https://www.newindianexpress.com/states/kerala/2019/dec/31/bpcls-lpg-pipeline-project-in-kerala-back-on-track-to-be-commissioned-upto-palakkad-in-april-2020-2082916.html |access-date=2023-10-04 |website=The New Indian Express}}</ref> LPG storage and bulk dispatch terminals of Bharat Petroleum Corporation Limited (BPCL) are also present.<ref>{{Cite web |last=www.ETEnergyworld.com |title=Indian Oil Corp to expand LPG facilities in Kerala and Tamil Nadu - ET EnergyWorld |url=http://energy.economictimes.indiatimes.com/news/oil-and-gas/indian-oil-corp-to-expand-lpg-facilities-in-kerala-and-tamil-nadu/58089256 |access-date=2023-10-04 |website=ETEnergyworld.com |language=en}}</ref>

==Pharmaceutical==
[[AVP Research Foundation|Arya Vaidya Pharmacy Coimbatore (AVP)]], one of the major dealers of ayurvedic medical science, has its major and largest medicine manufacturing unit in Kanjikode.<ref>{{Cite web |title=Factory |url=https://www.avpayurveda.com/factories/ |access-date=2023-10-06 |website=Healing Through Ayurveda |language=en-GB}}</ref> [[Arya Vaidya Sala|Kottakkal Arya Vaidya Sala]], another major dealer of ayurvedic medical science, also has a manufacturing unit.<ref>{{Cite web |title=Manufacturing Units {{!}} Arya Vaidya Sala Kottakkal |url=https://www.aryavaidyasala.com/mfgunits.php |access-date=2023-10-06 |website=www.aryavaidyasala.com}}</ref> There are also a number of pharmaceuticals located here related to allopathic medicine.<ref>{{Cite web |last=Corporation |first=Lewasol |title=Welcome to Labinduss Limited Kerala India - Oral Liquid Section, Capsules, External Preparations Lotions, External Preparations Cream, Ointment, Liniments |url=http://www.labinduss.com/ |access-date=2023-10-06 |website=Labindus Limited |language=en}}</ref>

==Steel==

There are a number of large and medium iron and steel industries which are mainly concentrated along Kanjikode Para road.<ref>{{Cite news |date=2015-11-05 |title=Chemical contamination posing threat to Korayar |language=en-IN |work=The Hindu |url=https://www.thehindu.com/news/national/kerala/chemical-contamination-posing-threat-to-korayar/article7848857.ece |access-date=2023-10-04 |issn=0971-751X}}</ref>

==Textile==

{{Empty section|date=October 2023}}

==Cement==

{{Empty section|date=October 2023}}

==Others==

{{Empty section|date=October 2023}}

==References==
{{reflist}}

[[Category:Economies by city in Kerala|Palakkad]]
[[Category:Palakkad]]

Aditya Dicky Singh

2023-09-07T21:10:53Z

RoscoeChristy0:

{{Short description|Indian wildlife conservationist and wildlife photographer (1966–2023)}}

{{Infobox person
| name = Aditya 'Dicky' Singh
| image =
| caption =
| birth_date = May 1966
| birth_place =
| death_date = {{death date and age|2023|09|06|1966|05}}
| death_place =
| occupation = conservationist, photographer
| spouse = Poonam Singh
| children = 1
}}

'''Aditya 'Dicky' Singh''' (May 1966 – September 6, 2023) was an [[India]]n wildlife conservationist and wildlife photographer.<ref name=IE>{{cite web|url=https://indianexpress.com/article/india/aditya-dicky-singh-ranthambores-bureaucrat-turned-conservationist-dies-57-8927424/|title=Aditya ‘Dicky’ Singh, Ranthambore’s bureaucrat-turned-conservationist, dies at 57|first=Hamza|last=Khan|publisher=[[The Indian Express]]|website=indianexpress.com|access-date=7 September 2023}}</ref><ref name=H>{{cite web|url=https://www.thehindu.com/news/national/conservationist-aditya-dicky-singh-who-left-civil-services-to-build-forest-dies-at-57/article67277643.ece|title=Conservationist Aditya ‘Dicky’ Singh, who left civil services to build forest, dies at 57|publisher=[[The Hindu]]|website=thehindu.com|access-date=7 September 2023}}</ref><ref name=DH>{{cite web|url=https://www.deccanherald.com/india/conservationist-aditya-dicky-singh-who-left-civil-services-to-build-forest-dies-at-57-2675405|title=Conservationist Aditya 'Dicky' Singh, who left civil services to build forest, dies at 57|agency=[[Press Trust of India]]|publisher=[[deccan Herald]]|website=deccanherald.com|access-date=7 September 2023}}</ref>

== Career ==
Singh did his schooling from the [[Modern School, Barakhamba]] in [[New Delhi]].<ref>{{cite web|url=https://dickysingh.com/about/|title=Me|access-date=8 September 2023}}</ref><ref name=SNF>{{cite web|url=https://www.sanctuarynaturefoundation.org/article/meet-aditya-dicky-singh|title=Meet Aditya Dicky Singh|author=[[Bittu Sahgal]]|access-date=8 September 2023}}</ref>

He had a bachelor's degree in civil engineering from [[Bangalore]].<ref name=MANSWORLD>{{cite web| url= https://www.mansworldindia.com/experiences/photography/meet-aditya-dicky-singh-the-photographer-who-raised-a-forest/|title=Meet Aditya ‘Dicky’ Singh, The Photographer Who Built A Forest|first=Shail|last=Desai|publisher=Man's World| website =mansworldindia.com|access-date=7 September 2023}}</ref> He was an [[Indian Administrative Service|IAS]] officer. He joined and then left the [[Civil Services of India|Indian Civil Service]] to pursue his interests in wildlife conservation and wildlife photography.<ref name=H/>

Singh was famous for his project on the edge of [[Ranthambore National Park]] in [[Rajasthan]], India in which he converted 40 acres of land on the edge of Ranthambore into a wild area over decades from 1998 onwards.<ref name="H" />

Initially, Singh and his wife leased government property in [[Khilchipur]] which they transformed into a resort that started operations in 1998. Eventually, they closed down their resort and had a six-room luxury homestay in their own house.<ref name=MANSWORLD/>

Singh was either a field assistant or a line producer for many wildlife documentaries for the [[BBC]]'s Wildlife Division, [[National Geographic]] Film and Television, Japan's NHK Broadcasting Service, Irish television, and others.<ref name=IE/>

He bought a patch of land near Ranthambore Fort in 2000. Eventually, he had accumulated 50 acres of land and he decided to reforest the area. They kept buying patches of adjacent land which they fenced off and left unattended. It took a decade for trees to grow back on their land.<ref name=MANSWORLD/>

Singh was involved in tiger conservation projects and also played a key role in the setting up, planning and execution of an anti-poaching initiative called 'Operation Co-Operation' which was a joint effort between the local Forest Department and the Ranthambhore National Park, and which led to the identification and capture of tiger poachers.<ref>{{cite web|url=https://www.bqprime.com/nation/renowned-wildlife-photographer-aditya-dicky-singh-dies-at-55|title=Renowned Wildlife Photographer Aditya 'Dicky' Singh Dies At 57|website=bqprime.com|access-date=7 September 2023}}</ref>

Singh was the author of the book "Noor: Queen of Ranthambore" about the tigress Noor.<ref name=H/>

== Awards ==
He won the Carl Zeiss Award for Conservation in 2012 and the Sanctuary Wildlife Photographer of the Year award in 2011.<ref name=SNF/>

== Personal life ==
Singh was married to Poonam and had a daughter named Nyra.<ref name="H" />

He died of a heart attack in his sleep on September 6, 2023. He was 57 years old.<ref name="H" />

[[Valmik Thapar]] described Singh as one of the finest wildlife photographers.<ref name="DH" />

==References==
{{Reflist}}

==External links==
* {{twitter|adityadickysin}}

{{DEFAULTSORT:Singh, Aditya Dicky}}
[[Category:1966 births]]
[[Category:2023 deaths]]
[[Category:Indian conservationists]]
[[Category:20th-century Indian non-fiction writers]]
[[Category:21st-century Indian non-fiction writers]]

Battle of Ropar (1710)

2023-07-18T19:04:16Z

RoscoeChristy0:

{{Short description|Historycal conflict in India}}

{{Infobox military conflict
| conflict = Battle of Ropar
| place = [[Ropar]]
| partof = [[Mughal-Sikh Wars]]
| date = May 1710
| result = Sikh Victory
| combatant1 = [[File:Blue Putaran Nishan Sahib.png|30px]] [[Khalsa]] ([[Sikhs]])
| combatant2 = [[File:Alam of the Mughal Empire.svg|30px]] [[Mughal Empire]]
| commander1 = [[File:Blue Putaran Nishan Sahib.png|20px]] [[Banda Singh Bahadur]]
| commander2 = [[File:Alam of the Mughal Empire.svg|20px]] Sher Mohammad Khan{{WIA}}<br>[[File:Alam of the Mughal Empire.svg|20px]] Khizar Khan{{KIA}}<br>[[File:Alam of the Mughal Empire.svg|20px]] Nashtar Khan{{KIA}}<br>[[File:Alam of the Mughal Empire.svg|20px]] Wali Mohammad Khan{{KIA}}
| strength1 = Unknown
| strength2 = Unknown<br>2 Guns
| casualties1 =
| casualties2 =
}}
{{Campaignbox Mughal-Sikh Wars}}
The '''Battle of Ropar''' was fought in May 1710 by the Sikh forces led by [[Banda Singh Bahadur]] and the Mughal forces led by Sher Mohammad Khan of [[Malerkotla]].

==Background==

Wazir Khan, the governor of [[Sirhind]] found out that the Sikhs from [[Majha]] had assembled at [[Kiratpur Sahib]]. Therefore, when the Sikhs reached [[Ropar]], Sher Mohammad Khan along with Khizar Khan, Nashtar Khan and Wali Mohammad Khan were there to block the Sikhs passage and offer them a battle.<ref name ="Harbans">{{cite book|title=Banda Singh Bahadur and Sikh Sovereignty|last=Sagoo|first=Harbans Kaur|url=https://archive.org/details/BandaSinghBahadurAndSikhSovereignty/page/n143/mode/2up|year=2001|isbn=9788176293006|publisher=Deep & Deep Publications |pages=129}}</ref> The Mughals had weapons and a superior number of horses while the Sikhs had a small army with insufficient weapons.<ref name=Tactics>{{cite book|url=https://www.google.ca/books/edition/Battle_Tactics_And_War_Manoeuvres_of_the/ghlfDwAAQBAJ?hl=en&gbpv=1&dq=battle+of+ropar&pg=PT60&printsec=frontcover|title=Battle Tactics And War Manoeuvres of the Sikhs|author=D.S Saggu VSM|isbn=9781642490060}}</ref>

==Battle==

Both sides are said to show great signs of bravery and courage. As they were fighting, there came a bad dust storm which forced both parties to withdraw for the night.<ref name=s>{{cite book |last1=Dhillon |first1=Harish |title=First Raj of the Sikhs |publisher=Hay House |isbn=9789381398395 |url=https://www.google.ca/books/edition/First_Raj_of_the_Sikhs/Vg89BAAAQBAJ?hl=en&gbpv=1&dq=battle+of+ropar&pg=PT102&printsec=frontcover}}</ref> On the next day, a fresh contingent of Sikhs arrived to reinforce the remaining Sikhs. Immediately a bullet struck Khizar Khan in the head which caused confusion.<ref>{{cite book |last1=Sampath |first1=Vikram |title=Bravehearts of Bharat |publisher=Penguin Random House India Private Limited |isbn=9789354928284 |url=https://www.google.ca/books/edition/Bravehearts_of_Bharat/GBGcEAAAQBAJ?hl=en&gbpv=1&dq=khizar+khan+bullet&pg=PT235&printsec=frontcover}}</ref><ref>{{cite book |last1=Nijjar |first1=Bakhshish Singh |title=Panjab Under the Later Mughals, 1707-1759 |publisher=New Academic Publishing Company |page=47 |url=https://www.google.ca/books/edition/Panjab_Under_the_Later_Mughals_1707_1759/RESzeNDCEuIC?hl=en&gbpv=1&bsq=khizar+khan+bullet&dq=khizar+khan+bullet&printsec=frontcover}}</ref> Nashtar and Wali Mohammad Khan tried to retrieve the dead body of Khizar Khan but were killed while doing so. Sher Mohammad Khan fled away due to being seriously wounded.<ref name=Tactics/> With most of their leaders killed, the remaining force retreated back to [[Sirhind]].<ref>{{cite book|url=https://archive.org/details/Sikhism-ItsPhilosophyAndHistory/page/434/mode/2up?q=jagat|title=Sikhism - Its Philosophy And History|author=Insitute of Sikh Studies|pages=434|isbn=9788185815039}}</ref><ref>{{cite book |last1=Singh |first1=Patwant |title=The Sikhs |publisher=Knopf |isbn=9780375407284 |page=72 |url=https://www.discoversikhism.com/sikh_library/english/the_sikhs_patwant_singh.html}}</ref>

==Aftermath==

After this battle, this force merged with [[Banda Singh Bahadur]]'s force and crushed the Mughals in the [[Battle of Chappar Chiri]].<ref name=s/>

== See also ==
* [[Nihang]]
* [[Martyrdom in Sikhism|Martyrdom and Sikhism]]

==References==
{{reflist}}
{{DEFAULTSORT:Ropar, Battle}}

[[Category:Battles involving the Sikhs]]
[[Category:History of India]]

{{India-battle-stub}}
{{Sikhism-stub}}
{{battle-stub}}

Richard Illingworth

2023-07-12T09:27:36Z

RoscoeChristy0: /* top */

{{short description|Cricket umpire}}
{{Use British English|date=August 2013}}
{{Use dmy dates|date=August 2013}}
{{Infobox cricketer
| name = Richard Illingworth
| image = Richard_illingworth.jpg
| country = England
| fullname = Richard Keith Illingworth
| birth_date = {{Birth date and age|1963|8|23|df=yes}}
| birth_place = [[Bradford]], [[West Riding of Yorkshire]], England
| batting = Right-handed
| bowling = Slow left–arm orthodox
| role = [[Umpire (cricket)|Umpire]], Bowler
| family =
| international = true
| internationalspan = 1991–1996

| testdebutdate = 4 July
| testdebutyear = 1991
| testdebutagainst = West Indies
| testcap = 551
| lasttestdate = 26 December
| lasttestyear = 1995
| lasttestagainst = South Africa

| odidebutdate = 23 May
| odidebutyear = 1991
| odidebutagainst = West Indies
| odicap = 113
| lastodidate = 9 March
| lastodiyear = 1996
| lastodiagainst = Pakistan

| club1 = [[Worcestershire County Cricket Club|Worcestershire]]
| year1 = 1982–2000
| club2 = [[KwaZulu-Natal (cricket team)|Natal]]
| year2 = 1988/89
| club3 = [[Derbyshire County Cricket Club|Derbyshire]]
| year3 = 2001

| umpire = yes
| testsumpired = 64
| umptestdebutyr = 2012
| umptestlastyr = 2023
| odisumpired = 78
| umpodidebutyr = 2010
| umpodilastyr = 2023
| t20isumpired = 27
| umpt20idebutyr = 2010
| umpt20ilastyr = 2022

| wtestsumpired = 1
| umpwtestdebutyr = 2005
| umpwtestlastyr =
| wodisumpired = 6
| umpwodidebutyr = 2003
| umpwodilastyr = 2008
| wt20isumpired = 13
| umpwt20idebutyr = 2011
| umpwt20ilastyr = 2016

| columns = 4
| column1 = [[Test cricket|Test]]
| matches1 = 9
| runs1 = 128
| bat avg1 = 18.28
| 100s/50s1 = 0/0
| top score1 = 28
| deliveries1 = 1,485
| wickets1 = 19
| bowl avg1 = 32.36
| fivefor1 = 0
| tenfor1 = 0
| best bowling1 = 4/96
| catches/stumpings1 = 5/–
| column2 = [[One Day International|ODI]]
| matches2 = 25
| runs2 = 68
| bat avg2 = 11.33
| 100s/50s2 = 0/0
| top score2 = 14
| deliveries2 = 1,501
| wickets2 = 30
| bowl avg2 = 35.29
| fivefor2 = 0
| tenfor2 = 0
| best bowling2 = 3/33
| catches/stumpings2 = 8/–
| column3 = [[First-class cricket|FC]]
| matches3 = 376
| runs3 = 7,027
| bat avg3 = 22.45
| 100s/50s3 = 4/21
| top score3 = 120[[not out|*]]
| deliveries3 = 65,868
| wickets3 = 831
| bowl avg3 = 31.54
| fivefor3 = 27
| tenfor3 = 6
| best bowling3 = 7/50
| catches/stumpings3 = 161/–
| column4 = [[List A cricket|LA]]
| matches4 = 381
| runs4 = 1,458
| bat avg4 = 14.87
| 100s/50s4 = 0/1
| top score4 = 53[[not out|*]]
| deliveries4 = 16,918
| wickets4 = 412
| bowl avg4 = 27.08
| fivefor4 = 2
| tenfor4 = 0
| best bowling4 = 5/24
| catches/stumpings4 = 93/–
| date = 9 July 2023
| source = https://content.cricinfo.com/england/content/player/15383.html Cricinfo
}}

'''Richard Keith Illingworth''' (born 23 August 1963) is an English former [[cricket]]er, who is currently an [[Umpire (cricket)|umpire]].<ref>{{cite web|url=https://www.icc-cricket.com/news/657430 |title=International cricketers turned umpires |work=International Cricket Council |access-date=7 April 2018}}</ref> The bulk of his domestic cricketing career occurred with [[Worcestershire County Cricket Club|Worcestershire]], although he had a spell with [[Derbyshire County Cricket Club|Derbyshire]], and overseas with [[KwaZulu-Natal Province|Natal]]. He played in nine [[Test cricket|Tests]] and twenty five [[One Day International|ODIs]] for [[England cricket team|England]], including participating in the [[1992 Cricket World Cup|1992]] and [[1996 Cricket World Cup|1996]] [[Cricket World Cup]]s. Several websites, mistakenly, report that he is [[Ray Illingworth]]'s son but the two are not related.

==Playing career==
Playing mainly as a left-arm [[spin bowling|spinner]], Illingworth made his [[first-class cricket|first-class]] debut in 1982, promoted to the [[Worcestershire County Cricket Club|Worcestershire]] first team after just two Second XI appearances and taking 3–61 against [[Somerset County Cricket Club|Somerset]]. His figures that year were fairly modest; eighteen first-class wickets cost him over 45 apiece, and he bowled just eight overs in [[one-day cricket]]; but Worcestershire saw potential and persevered. By 1983, he was a first-team regular, taking forty eight first-class wickets, a figure he improved on (with 57) the following year. He did play one season (1988/89) in the South African [[Currie Cup (cricket)|Currie Cup]] for [[KwaZulu-Natal Province|Natal]], but otherwise played only English domestic cricket.

For most of his twenty-season [[county cricket]] career, Illingworth remained with Worcestershire. Perhaps the highlights of his county career came when the county won the [[County Championship]] in 1988 and 1989. After he failed to win a contract extension in 2000, the last two years of his time in the first-class game were spent with [[Derbyshire County Cricket Club|Derbyshire]]. He finished with 831 wickets at an average of 31.54, and more than 7,000 runs at 22.45, including four first-class centuries.

===One-Day International career===
In 1990, Illingworth had his most productive year, taking 75 wickets at a [[bowling average]] of 28.29, and he went on that winter's [[England Lions cricket team|A team]] tour to [[Pakistan]] and [[Sri Lanka]]. The following season, a well-timed burst of 5–49 against [[Northamptonshire County Cricket Club|Northants]] in a May [[National League (cricket)|Sunday League]] game helped to win him selection for the 1991 Texaco Trophy [[One Day International]] series against [[West Indian cricket team|West Indies]] a few days later. He played a crucial part in the match, allowing the tourists just 20 runs from his ten overs for the wicket of [[Jeff Dujon]], and then putting on an unbroken partnership of 23 with [[Mike Atherton]] as England recorded a thrilling [[The result in cricket|one-wicket victory]].

Illingworth went onto play for England in two [[Cricket World Cup]]s, in 1992 and 1996. During the 1992 World Cup, Illingworth played in the final, giving away 50 runs in his 10 overs for the wicket of [[Javed Miandad]], and also catching [[Imran Khan]] at long-on. In the same match, he had the misfortune of being the last man dismissed as England fell short in the final for the third time.

===Test career===
Although his performances in the other two Texaco Trophy matches of 1991 were less impressive, he did take the wickets of [[Richie Richardson]] and a young [[Brian Lara]] in the seven-wicket win at [[Lord's]], and also held a catch off [[Phil DeFreitas]] to remove captain [[Viv Richards]]. Illingworth missed out on selection for the first two [[Test cricket|Test matches]] that year, but was selected for the Third Test at [[Trent Bridge]], and took the wicket of [[Phil Simmons]] with his first ball in [[Test cricket]], the first bowler since [[Intikhab Alam]] in 1959/60 to achieve this feat, and only the eleventh of all time.<ref name="Cap">{{cite book |title=If The Cap Fits |last=Bateman |first=Colin |year=1993 |publisher=Tony Williams Publications |isbn=1-869833-21-X |page=[https://archive.org/details/ifcapfits0000unse/page/98 98] |url=https://archive.org/details/ifcapfits0000unse/page/98 }}</ref> He also bowled Richards on his way to 3–110, but two stubborn rearguard displays with the bat (adding 42 with [[Robin Smith (cricketer)|Robin Smith]] in the first innings and 38 with DeFreitas in the second) could not prevent England sliding to a nine-wicket loss.

Illingworth retained his place for the Fourth Test at [[Edgbaston Cricket Ground|Edgbaston]], batting at number 11; this match was notable for the fact that all eleven England players had a first-class century to their name. Despite this, England were easily beaten, Illingworth going for almost five runs an over and picking up just one wicket in the match. He was dropped for [[The Oval]], and replaced by [[Phil Tufnell]]. Tufnell took 6–25 in the first innings of that match to help propel England to a series-levelling win. Illingworth did not to play another Test until 1995, although he retained his one-day place for a couple of years, and did well in the 1992 [[Cricket World Cup|World Cup]].

By 1995, Illingworth had been out of the England side for two years, but the selectors were impressed by his reliable performances for his county, and called him up for the Test series against West Indies. He played in all but the Fourth Test (for which he was replaced by [[John Emburey]]), and the Sixth Test (for which he was incapacitated by injury). He won plaudits in this series for joining [[Mike Watkinson]] in a last-wicket stand in the Fifth Test which helped to ensure a drawn Test (and ultimately a drawn series), in spite of an injured finger. [[Christopher Martin-Jenkins]] praised "Illingworth`s courageous defiance of doctor`s orders".<ref>{{cite web |url=http://static.espncricinfo.com/db/ARCHIVE/1995/WI_IN_ENG/WI_ENG_T5_10-14AUG1995_MR |title=England v West Indies, Test 5|access-date=15 Mar 2022}}</ref> Although his series bowling figures of 6–215 were not particularly outstanding, he was selected for the winter tour to South Africa. It proved a good choice: Illingworth had his best series for England, taking nine Test wickets at an average of under 21. He also appeared four times in the 1996 [[Cricket World Cup|World Cup]], but thereafter the selectors' preference turned decisively to Tufnell, and Illingworth never played international cricket again.

==Umpiring career==
Illingworth was appointed to the [[England and Wales Cricket Board|ECB]] full list of first-class umpires for the [[2006 English cricket season]].<ref name="cricinfo2">{{cite web|url=http://content.cricinfo.com/england/content/story/222989.html|title=First-class umpires named for 2006|date=24 October 2005|publisher=Cricinfo|access-date=6 March 2009}}</ref> As at the end of the [[2008 English cricket season]] Illingworth had umpired 47 first-class matches.<ref name="cricketarchive1">{{cite web|url=https://cricketarchive.com/Archive/Players/1/1992/Umpire_in_First-Class_Matches.html|title=Richard Illingworth as Umpire in First-Class Matches|publisher=Cricketarchive.com|access-date=6 March 2009}}</ref> It was confirmed that he, and [[Richard Kettleborough]], were promoted onto the [[International Panel of Umpires and Referees|ICC International list]] on 9 November 2009. Richard Illingworth joined ICC's elite umpire panel on 25 June 2013.

He was selected as one of the twenty umpires to stand in matches during the [[2015 Cricket World Cup]].<ref>{{cite web|url= http://www.icc-cricket.com/news/2014/media-releases/83319/icc-announces-match-officials-for-icc-cricket-world-cup-2015|title= ICC announces match officials for ICC Cricket World Cup 2015|publisher= ICC Cricket|date= 2 December 2014|access-date= 12 February 2015|url-status= dead|archive-url= https://web.archive.org/web/20150330201852/http://www.icc-cricket.com/news/2014/media-releases/83319/icc-announces-match-officials-for-icc-cricket-world-cup-2015|archive-date= 30 March 2015|df= dmy-all}}</ref> In April 2019, he was named as one of the sixteen umpires to stand in matches during the [[2019 Cricket World Cup]].<ref>{{cite web|url=https://www.icc-cricket.com/media-releases/1198051 |title=Match officials for ICC Men’s Cricket World Cup 2019 announced |work=International Cricket Council |access-date=26 April 2019}}</ref><ref>{{cite web|url=http://www.espncricinfo.com/ci/content/story/1182149.html |title=Umpire Ian Gould to retire after World Cup |work=ESPN Cricinfo |access-date=26 April 2019}}</ref> In July 2019, he was named as one of the two on-field umpires for the first semi-final match, between [[India national cricket team|India]] and [[New Zealand national cricket team|New Zealand]].<ref>{{cite web|url=https://www.icc-cricket.com/media-releases/1266863 |title=Officials appointed for ICC Men’s Cricket World Cup semi-finals |work=International Cricket Council |access-date=7 July 2019}}</ref> He was declared ICC Umpire of the year for 2019 and won the David Shepherd Trophy.

In January 2021, Illingworth was named as one of the umpires for the Test matches between [[West Indian cricket team in Bangladesh in 2020–21|Bangladesh and the West Indies]], the first time since the start of the [[COVID-19 pandemic]] that a neutral umpire was named for a Test series.<ref>{{cite web|url=https://www.espncricinfo.com/story/ban-vs-wi-2020-21-richard-illingworth-to-become-first-neutral-umpire-in-test-cricket-since-covid-19-pandemic-1249164 |title=Richard Illingworth to become first neutral umpire in Test cricket since Covid-19 pandemic |work=ESPN Cricinfo |access-date=25 January 2021}}</ref> In June 2021, Illingworth was named as one of the on-field umpires for the [[2021 ICC World Test Championship Final]].<ref>{{cite web|url=https://www.icc-cricket.com/media-releases/2167649 |title=Match officials for ICC World Test Championship Final announced |work=International Cricket Council |access-date=8 June 2021}}</ref> He also officiated at the 2023 WTC final at the Oval.

==See also==
* [[List of Test cricket umpires]]
* [[List of One Day International cricket umpires]]
* [[List of Twenty20 International cricket umpires]]

==References==
{{Reflist}}

==External links==
* {{Cricinfo|id=15383}}

{{Elite Panel of ICC Umpires}}
{{ICC Umpire of the Year}}
{{England Squad 1992 Cricket World Cup}}
{{England Squad 1996 Cricket World Cup}}
{{ECB Umpires List}}

{{DEFAULTSORT:Illingworth, Richard}}
[[Category:1963 births]]
[[Category:Living people]]
[[Category:English cricket umpires]]
[[Category:English Test cricket umpires]]
[[Category:English One Day International cricket umpires]]
[[Category:English Twenty20 International cricket umpires]]
[[Category:Derbyshire cricketers]]
[[Category:England One Day International cricketers]]
[[Category:England Test cricketers]]
[[Category:English cricketers]]
[[Category:KwaZulu-Natal cricketers]]
[[Category:Worcestershire cricketers]]
[[Category:Cricketers from Bradford]]
[[Category:Cricketers at the 1992 Cricket World Cup]]
[[Category:Cricketers at the 1996 Cricket World Cup]]
[[Category:Marylebone Cricket Club cricketers]]
[[Category:Worcestershire Cricket Board cricketers]]
[[Category:Wiltshire cricketers]]
[[Category:Test and County Cricket Board Under-25s XI cricketers]]
[[Category:English cricketers of 1969 to 2000]]

Inflation

2023-04-09T07:07:32Z

RoscoeChristy0: Just completed a comprehensive guide.

{{short description|Devaluation of currency over a period of time}}
{{about|a rise in general price level|the expansion of the early universe|Inflation (cosmology)|other uses|Inflation (disambiguation)}}
{{Use mdy dates}}
{{Macroeconomics sidebar}}
[[File:World inflation rate April 2023.png|thumb|Inflation rates among members of the [[International Monetary Fund]] in April 2023.]]
[[File:UK and US 1989-present monthly CPI.svg|thumb|UK and US monthly inflation rates from January 1989 to the present.<ref>{{cite web |title=Consumer Price Index for All Urban Consumers (CPI-U): U.S. city average, by expenditure category, March 2022 |url=https://view.officeapps.live.com/op/view.aspx?src=https%3A%2F%2Fwww.bls.gov%2Fcpi%2Ftables%2Fsupplemental-files%2Fnews-release-table1-202203.xlsx&wdOrigin=BROWSELINK |access-date=12 March 2022 |website=[[Bureau of Labor Statistics]]}}</ref><ref>{{cite web |title=CPIH Annual Rate 00: All Items 2015=100 |url=https://www.ons.gov.uk/economy/inflationandpriceindices/timeseries/l55o/mm23 |access-date=13 April 2022 |website=[[Office for National Statistics]] |archive-date=April 24, 2022 |archive-url=https://web.archive.org/web/20220424051728/https://www.ons.gov.uk/economy/inflationandpriceindices/timeseries/l55o/mm23 |url-status=live }}</ref>]]

In [[economics]], '''inflation''' is an increase in the general price level of goods and services in an economy.<ref>{{citation|url=https://www.clevelandfed.org/center-for-inflation-research/inflation-101/what-is-inflation-start|title=What Is Inflation?|publisher=Cleveland Federal Reserve|access-date=June 8, 2023|archive-date=March 30, 2021|archive-url=https://web.archive.org/web/20210330131140/https://www.clevelandfed.org/our-research/center-for-inflation-research/inflation-101/what-is-inflation-get-started|url-status=dead}}</ref><ref>{{cite web|url=https://www.bls.gov/bls/inflation.htm|title=Overview of BLS Statistics on Inflation and Prices : U.S. Bureau of Labor Statistics|publisher=Bureau of Labor Statistics|access-date=November 3, 2021|archive-date=December 10, 2021|archive-url=https://web.archive.org/web/20211210164020/https://www.bls.gov/bls/inflation.htm|url-status=live}}</ref><ref>{{cite news |title=How does the government measure inflation? |url=https://www.brookings.edu/blog/up-front/2021/06/28/how-does-the-government-measure-inflation/ |publisher=Brookings Institution |author1=Nasiha Salwati |author2=David Wessel |access-date=November 3, 2021 |archive-date=November 15, 2021 |archive-url=https://web.archive.org/web/20211115162420/https://www.brookings.edu/blog/up-front/2021/06/28/how-does-the-government-measure-inflation/ |url-status=live }}</ref><ref>{{cite web|url=https://www.federalreserve.gov/faqs/economy_14419.htm|title=The Fed – What is inflation and how does the Federal Reserve evaluate changes in the rate of inflation?|website=Board of Governors of the Federal Reserve System|access-date=November 3, 2021|archive-date=July 17, 2021|archive-url=https://web.archive.org/web/20210717231718/https://www.federalreserve.gov/faqs/economy_14419.htm|url-status=live}}</ref> When the general price level rises, each unit of [[currency]] buys fewer goods and services; consequently, inflation corresponds to a reduction in the [[purchasing power]] of money.<ref>[http://www.sedlabanki.is/?PageID=195 Why price stability?] {{webarchive |url=https://web.archive.org/web/20081014031836/http://www.sedlabanki.is/?PageID=195 }}, Central Bank of Iceland, Accessed on September 11, 2008.</ref><ref>Paul H. Walgenbach, Norman E. Dittrich and Ernest I. Hanson, (1973), Financial Accounting, New York: Harcourt Brace Javonovich, Inc. Page 429. "The Measuring Unit principle: The unit of measure in accounting shall be the base money unit of the most relevant currency. This principle also assumes that the unit of measure is stable; that is, changes in its general purchasing power are not considered sufficiently important to require adjustments to the basic financial statements."</ref> The opposite of inflation is [[deflation]], a decrease in the general price level of goods and services. The common measure of inflation is the '''inflation rate''', the annualized percentage change in a general [[price index]].<ref name="Mankiw 2002 22–32">{{Harvnb|Mankiw|2002|pp=22–32}}</ref> As prices faced by households do not all increase at the same rate, the [[consumer price index]] (CPI) is often used for this purpose. The [[employment cost index]] is also used for wages in the United States.

There is disagreement among economists as to the causes of inflation. Low or moderate inflation is widely attributed to fluctuations in [[Real versus nominal value (economics)|real]] [[demand]] for goods and services or changes in available supplies such as during [[scarcities]].<ref>{{cite web|url=http://research.stlouisfed.org/fred2/series/MZMV|title=MZM velocity|access-date=September 13, 2014|archive-date=June 16, 2016|archive-url=https://web.archive.org/web/20160616221321/https://research.stlouisfed.org/fred2/series/MZMV|url-status=live}}</ref> Moderate inflation affects economies in both positive and negative ways. The negative effects would include an increase in the [[opportunity cost]] of holding money, uncertainty over future inflation, which may discourage investment and savings, and if inflation were rapid enough, shortages of [[Good (economics)|goods]] as consumers begin [[Hoarding (economics)|hoarding]] out of concern that prices will increase in the future. Positive effects include reducing [[unemployment]] due to [[Nominal rigidity|nominal wage rigidity]],<ref>{{Harvnb|Mankiw|2002|pp=238–255}}</ref> allowing the central bank greater freedom in carrying out [[monetary policy]], encouraging loans and investment instead of money hoarding, and avoiding the inefficiencies associated with deflation.

Today, most{{Weasel inline}} economists favour a low and steady rate of inflation.<ref name="econjournalwatch.org">Hummel, Jeffrey Rogers. "Death and Taxes, Including Inflation: the Public versus Economists" (January 2007).[http://econjwatch.org/articles/death-and-taxes-including-inflation-the-public-versus-economists] {{Webarchive|url=https://web.archive.org/web/20131225042059/http://econjwatch.org/articles/death-and-taxes-including-inflation-the-public-versus-economists}} p. 56</ref> Low (as opposed to zero or [[Deflation|negative]]) inflation reduces the probability of economic [[recessions]] by enabling the labor market to adjust more quickly in a downturn and reduces the risk that a [[liquidity trap]] prevents [[monetary policy]] from stabilizing the economy, while avoiding the costs associated with high inflation.<ref name="aeaweb.org">"[http://www.aeaweb.org/articles.php?doi=10.1257/089533003772034934 Escaping from a Liquidity Trap and Deflation: The Foolproof Way and Others] {{Webarchive|url=https://web.archive.org/web/20140226234952/http://www.aeaweb.org/articles.php?doi=10.1257%2F089533003772034934 }}" Lars E.O. Svensson, ''Journal of Economic Perspectives'', Volume 17, Issue 4 Fall 2003, pp. 145–166</ref> The task of keeping the rate of inflation low and stable is usually given to [[Monetary authority|monetary authorities]]. Generally, these monetary authorities are the [[central bank]]s that control monetary policy through the setting of [[interest rate]]s, by carrying out [[open market operation]]s and (more rarely) changing commercial bank [[reserve requirements]].<ref name=Taylor>{{cite book |last=Taylor |first=Timothy |title=Principles of Economics |publisher=Freeload Press |isbn=978-1-930789-05-0}}</ref>

== Terminology ==
The term originates from the Latin ''inflare'' (to blow into or inflate) and was initially used in America in 1838 with regard to inflating the currency.<ref name=PeterB>{{cite book |last=Bernholz |first=Peter |url=https://www.elgaronline.com/view/9781784717629.00007.xml |title=Introduction |year=2015 |publisher=Edward Elgar Publishing |isbn=978-1-78471-763-6 |language=en-US |access-date=June 9, 2022 |archive-date=June 18, 2021 |archive-url=https://web.archive.org/web/20210618191304/https://www.elgaronline.com/view/9781784717629.00007.xml |url-status=live }}</ref> The term was used "not in reference to something that happens to prices, but as something that happens to a paper currency".<ref name="bryan">Bryan, Michael F., [https://www.clevelandfed.org/newsroom-and-events/publications/economic-commentary/economic-commentary-archives/1997-economic-commentaries/ec-19971015-on-the-origin-and-evolution-of-the-word-inflation.aspx "On the Origin and Evolution of the Word Inflation"] {{Webarchive|url=https://web.archive.org/web/20211028064428/https://www.clevelandfed.org/newsroom-and-events/publications/economic-commentary/economic-commentary-archives/1997-economic-commentaries/ec-19971015-on-the-origin-and-evolution-of-the-word-inflation.aspx }}, ''Federal Reserve Bank of Cleveland, Economic Commentary,'' 15 October 1997.</ref> The resulting imbalance between the quantity of money and the amount needed for trade caused prices to increase. Over time, the term ''inflation'' has evolved to refer to increases in the price level; an increase in the money supply may be called [[monetary inflation]] to distinguish it from rising prices, which for clarity may be called "price inflation".<ref name="bryan"/>

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 cheaper. These changes are not related to inflation; they reflect a shift in tastes. Inflation is related to the value of currency itself. When currency was linked with gold, if new gold deposits were found, the price of gold and the value of currency would fall, and consequently, prices of all other goods would become higher.<ref>{{cite web|url=https://www.vox.com/cards/inflation-definition-and-explanation/inflation-explanation|title=What is inflation? – Inflation, explained – Vox|work=Vox|access-date=September 13, 2014|archive-date=August 4, 2014|archive-url=https://web.archive.org/web/20140804103626/http://www.vox.com/cards/inflation-definition-and-explanation/inflation-explanation|url-status=live}}</ref>

===Classical economics===
By the nineteenth century, economists categorised three separate factors that cause a rise or fall in the price of goods: a change in the ''[[Value (economics)|value]]'' or production costs of the good, a change in the ''price of money'' which then was usually a fluctuation in the [[commodity]] price of the metallic content in the currency, and ''currency depreciation'' resulting from an increased supply of currency relative to the quantity of redeemable metal backing the currency. Following the proliferation of private [[banknote]] currency printed during the [[American Civil War]], the term "inflation" started to appear as a direct reference to the ''currency depreciation'' that occurred as the quantity of redeemable banknotes outstripped the quantity of metal available for their redemption. At that time, the term inflation referred to the [[devaluation]] of the currency, and not to a rise in the price of goods.<ref name="Bryan">{{cite journal|first=Michael F.|last=Bryan|url=https://www.clevelandfed.org/newsroom-and-events/publications/economic-commentary/economic-commentary-archives/1997-economic-commentaries/ec-19971015-on-the-origin-and-evolution-of-the-word-inflation.aspx|publisher=Federal Reserve Bank of Cleveland, Economic Commentary|title=On the Origin and Evolution of the Word "Inflation"|journal=Economic Commentary|issue=October 15, 1997|access-date=May 22, 2017|archive-date=October 28, 2021|archive-url=https://web.archive.org/web/20211028064428/https://www.clevelandfed.org/newsroom-and-events/publications/economic-commentary/economic-commentary-archives/1997-economic-commentaries/ec-19971015-on-the-origin-and-evolution-of-the-word-inflation.aspx|url-status=live}}</ref> This relationship between the over-supply of banknotes and a resulting [[depreciation]] in their value was noted by earlier classical economists such as [[David Hume]] and [[David Ricardo]], who would go on to examine and debate what effect a currency devaluation (later termed ''[[monetary inflation]]'') has on the price of goods (later termed ''price inflation'', and eventually just ''inflation'').<ref>Mark Blaug, "[https://books.google.com/books?id=4nd6alor2goC&dq=bullionist+inflation&pg=PA128 Economic Theory in Retrospect] {{Webarchive|url=https://web.archive.org/web/20230203015223/https://books.google.com/books?id=4nd6alor2goC&pg=PA127&lpg=PA127&dq=bullionist+inflation&source=web&ots=mG3_PT_O6q&sig=ViD-klPJPpaZxCBjdcPKh9zlwyU&hl=en&sa=X&oi=book_result&resnum=5&ct=result#PPA128,M1 }}", p. 129: "...this was the cause of inflation, or, to use the language of the day, 'the depreciation of banknotes.'"</ref>

=== Related concepts ===
Other economic concepts related to inflation include: [[deflation]]{{snd}}a fall in the general price level; [[disinflation]]{{snd}}a decrease in the rate of inflation; [[hyperinflation]]{{snd}}an out-of-control inflationary spiral; [[stagflation]]{{snd}}a combination of inflation, slow economic growth and high unemployment; [[reflation]]{{snd}}an attempt to raise the general level of prices to counteract deflationary pressures; and [[asset price inflation]]{{snd}}a general rise in the prices of financial assets without a corresponding increase in the prices of goods or services; [[agflation]]{{snd}}an advanced increase in the price for food and industrial agricultural crops when compared with the general rise in prices.

More specific forms of inflation refer to sectors whose prices vary semi-independently from the general trend. "House price inflation" applies to changes in the [[house price index]]<ref>[https://www.gov.uk/government/statistics/announcements/uk-house-price-index-november-2021 UK House Price Index] {{Webarchive|url=https://web.archive.org/web/20211028065426/https://www.gov.uk/government/statistics/announcements/uk-house-price-index-november-2021 }}.</ref> while "energy inflation" is dominated by the costs of oil and gas.<ref>Ieva Rubene and Gerrit Koester, [https://www.ecb.europa.eu/pub/economic-bulletin/focus/2021/html/ecb.ebbox202103_04~0a0c8f0814.en.html "Recent dynamics in energy inflation: the role of base effects and taxes"] {{Webarchive|url=https://web.archive.org/web/20211115170910/https://www.ecb.europa.eu/pub/economic-bulletin/focus/2021/html/ecb.ebbox202103_04~0a0c8f0814.en.html }} (2021).</ref>

==History==
[[File:US Historical Inflation Ancient.svg|thumb|350px|US historical inflation (in blue) and deflation (in green) from the mid-17th century to the beginning of the 21st.]]

Historically, when [[commodity money]] was used, periods of inflation and deflation would alternate depending on the condition of the economy. However, when large prolonged infusions of gold or silver into an economy occurred, this could lead to long periods of inflation.

The adoption of [[fiat currency]] by many countries, from the 18th century onwards, made much larger variations in the supply of money possible. Rapid increases in the [[money supply]] have taken place a number of times in countries experiencing political crises, producing [[hyperinflation]]s{{snd}}episodes of extreme inflation rates much higher than those observed in earlier periods of [[commodity money]]. The [[hyperinflation in the Weimar Republic]] of Germany is a notable example. Currently, the [[hyperinflation]] in [[Venezuela]] is the highest in the world, with an annual inflation rate of 833,997% as of October 2018.<ref>{{cite news |last1=Corina |first1=Pons |last2=Luc |first2=Cohen |last3=O'Brien |first3=Rosalba |title=Venezuela's annual inflation hit 833,997 percent in October: Congress |url=https://www.reuters.com/article/us-venezuela-economy/venezuelas-annual-inflation-hit-833997-percent-in-october-congress-idUSKCN1NC2F9 |access-date=9 November 2018 |work=Reuters |archive-date=December 12, 2021 |archive-url=https://web.archive.org/web/20211212194638/https://www.reuters.com/article/us-venezuela-economy/venezuelas-annual-inflation-hit-833997-percent-in-october-congress-idUSKCN1NC2F9 |url-status=live }}</ref>

Historically, inflations of varying magnitudes have occurred from the price revolution of the 16th century, which was driven by the flood of gold and particularly silver seized and mined by the Spaniards in Latin America, to the largest paper money inflation of all time in Hungary after World War II.<ref name=PeterB />

However, since the 1980s, inflation has been held low and stable in countries with independent [[central bank]]s. This has led to a moderation of the [[business cycle]] and a reduction in variation in most macroeconomic indicators{{snd}}an event known as the [[Great Moderation]].<ref>{{cite news |url=http://www.timesonline.co.uk/tol/comment/columnists/article1294376.ece |title=Welcome to 'the Great Moderation' |first=Gerard |last=Baker |work=The Times |publisher=Times Newspapers |location=London |issn=0140-0460 |access-date=15 April 2011 |archive-date=December 14, 2021 |archive-url=https://web.archive.org/web/20211214175030/https://www.thetimes.co.uk/ |url-status=live }}</ref>

===Historical inflationary periods===

{{multiple image
| align = right
| direction = vertical
| width = 350
| header =
| image1 =
Fineness_of_early_Roman_Imperial_silver_coins.png
| caption1 = Silver purity through time in early Roman imperial silver coins. To increase the number of silver coins in circulation while short on silver, the Roman imperial government repeatedly [[debasement|debased]] the coins. They melted relatively pure silver coins and then struck new silver coins of lower purity but of nominally equal value. Silver coins were relatively pure before Nero (AD 54-68), but by the 270s had hardly any silver left.
| image2 = Decline_of_the_antoninianus.jpg
| alt2 =
| caption2 = The silver content of Roman silver coins rapidly declined during the [[Crisis of the Third Century]].
}}

Rapid increases in the quantity of money or in the overall [[money supply]] have occurred in many different societies throughout history, changing with different forms of money used.<ref>{{Cite news|last=Dobson |first=Roger |title=How Alexander caused a great Babylon inflation |newspaper=[[The Independent]] |url=https://www.independent.co.uk/news/world/europe/how-alexander-caused-a-great-babylon-inflation-671072.html |archive-url=https://web.archive.org/web/20110515070120/http://www.independent.co.uk/news/world/europe/how-alexander-caused-a-great-babylon-inflation-671072.html |archive-date=May 15, 2011 |access-date=April 12, 2010 |url-status=dead |df=mdy-all }}</ref><ref>{{Cite book | last = Harl | first = Kenneth W. | author-link = Kenneth W. Harl | title = Coinage in the Roman Economy, 300 B.C. to A.D. 700 | place = [[Baltimore]] | publisher = [[The Johns Hopkins University Press]] | year=1996 | isbn = 0-8018-5291-9 }}</ref> For instance, when silver was used as currency, the government could collect silver coins, melt them down, mix them with other metals such as copper or lead and reissue them at the same [[Real versus nominal value (economics)|nominal value]], a process known as [[debasement]]. At the ascent of [[Nero]] as Roman emperor in AD 54, the [[denarius]] contained more than 90% silver, but by the 270s hardly any silver was left. By diluting the silver with other metals, the government could issue more coins without increasing the amount of silver used to make them. When the cost of each coin is lowered in this way, the government profits from an increase in [[seigniorage]].<ref>{{cite web |url=http://www.mint.ca/royalcanadianmintpublic/RcmImageLibrary.aspx?filename=RCM_AR06_E.pdf |title=Annual Report (2006), Royal Canadian Mint, p. 4 |publisher=Mint.ca |access-date=May 21, 2011 |archive-date=December 17, 2008 |archive-url=https://web.archive.org/web/20081217200449/http://www.mint.ca/royalcanadianmintpublic/RcmImageLibrary.aspx?filename=RCM_AR06_E.pdf |url-status=live }}</ref> This practice would increase the money supply but at the same time the relative value of each coin would be lowered. As the relative value of the coins becomes lower, consumers would need to give more coins in exchange for the same goods and services as before. These goods and services would experience a price increase as the value of each coin is reduced.<ref>Frank Shostak, "[https://mises.org/story/3018 Commodity Prices and Inflation: What's the connection", Mises Institute] {{Webarchive|url=https://web.archive.org/web/20090807064142/http://mises.org/story/3018 }}</ref>

===Ancient China===
[[Song dynasty]] China introduced the practice of printing paper money to create [[fiat currency]].<ref name="Glahn">{{cite book|author=Richard von Glahn|title=Fountain of Fortune: Money and Monetary Policy in China, 1000–1700|year=1996|publisher=University of California Press|isbn=978-0-520-20408-9|page=48}}</ref> During the Mongol [[Yuan dynasty]], the government spent a great deal of money fighting [[Mongol conquests|costly wars]], and reacted by printing more money, leading to inflation.<ref name="Ropp2010">{{cite book|author=Paul S. Ropp|title=China in World History|year=2010|publisher=Oxford University Press|isbn=978-0-19-517073-3|pages=82}}</ref> Fearing the inflation that plagued the Yuan dynasty, the [[Ming dynasty]] initially rejected the use of paper money, and reverted to using copper coins.<ref name="Bernholz">{{cite book|author=Peter Bernholz|title=Monetary Regimes and Inflation: History, Economic and Political Relationships|year=2003|publisher=Edward Elgar Publishing|isbn=978-1-84376-155-6|pages=53–55}}</ref>

===Medieval Egypt===
During the [[Mali Empire|Malian]] king [[Mansa Musa]]'s [[hajj]] to [[Mecca]] in 1324, he was reportedly accompanied by a [[camel train]] that included thousands of people and nearly a hundred camels. When he passed through [[Cairo]], he spent or gave away so much gold that it depressed its price in Egypt for over a decade,<ref>[https://web.archive.org/web/20060524015912/http://www.blackhistorypages.net/pages/mansamusa.php Mansa Musa]. Black History Pages</ref> reducing its purchasing power. A contemporary Arab historian remarked about Mansa Musa's visit:

{{blockquote|Gold was at a high price in Egypt until they came in that year. The [[mithqal]] did not go below 25 [[dirham]]s and was generally above, but from that time its value fell and it cheapened in price and has remained cheap till now. The mithqal does not exceed 22 dirhams or less. This has been the state of affairs for about twelve years until this day by reason of the large amount of gold which they brought into Egypt and spent there [...].|sign=[[Chihab Al-Umari]]|source=Kingdom of Mali<ref>{{cite web |title=Kingdom of Mali – Primary Source Documents |url=http://www.bu.edu/africa/outreach/resources/k_o_mali/ |website=African studies Center |publisher=[[Boston University]] |access-date=30 January 2012 |archive-date=November 24, 2015 |archive-url=https://web.archive.org/web/20151124051633/http://www.bu.edu/africa/outreach/resources/k_o_mali/ |url-status=live }}</ref>}}

==="Price revolution" in Western Europe===

From the second half of the 15th century to the first half of the 17th, Western Europe experienced a major inflationary cycle referred to as the "[[price revolution]]",<ref>[[Earl J. Hamilton]], ''American Treasure and the Price Revolution in Spain, 1501–1650'' Harvard Economic Studies, 43 (Cambridge, Massachusetts: [[Harvard University Press]], 1934)</ref><ref>{{cite web|url=http://www.chass.utoronto.ca/ecipa/archive/UT-ECIPA-MUNRO-99-02.pdf|archive-url=https://web.archive.org/web/20090306002320/http://www.chass.utoronto.ca/ecipa/archive/UT-ECIPA-MUNRO-99-02.pdf |url-status=dead |title=John Munro: ''The Monetary Origins of the 'Price Revolution':South Germany Silver Mining, Merchant Banking, and Venetian Commerce, 1470–1540'', Toronto 2003|archive-date=March 6, 2009}}</ref> with prices on average rising perhaps sixfold over 150 years. This is often attributed to the influx of gold and silver from the [[New World]] into [[Habsburg Spain]],<ref>{{cite book |author=Walton, Timothy R. |title=The Spanish Treasure Fleets |publisher=Pineapple Press (FL) |year= 1994|page=85 |isbn=1-56164-049-2}}</ref> with wider availability of [[Silver coin|silver]] in previously [[Great Bullion Famine|cash-starved Europe]] causing widespread inflation.<ref>{{Cite journal|url=https://ideas.repec.org/p/bsl/wpaper/2007-12.html|title=The Price Revolution in the 16th Century: Empirical Results from a Structural Vectorautoregression Model|first1=Peter|last1=Bernholz|first2=Peter|last2=Kugler|journal=Working Papers|via=ideas.repec.org|access-date=March 31, 2015|archive-date=April 25, 2021|archive-url=https://web.archive.org/web/20210425223334/https://ideas.repec.org/p/bsl/wpaper/2007-12.html|url-status=live}}</ref><ref>{{cite book |author=Tracy, James D. |title=Handbook of European History 1400–1600: Late Middle Ages, Renaissance, and Reformation |publisher=Brill Academic Publishers |location=Boston |year= 1994|page=655 |isbn=90-04-09762-7}}</ref> European population rebound from the [[Black Death]] began before the arrival of New World metal, and may have begun a process of inflation that New World silver compounded later in the 16th century.<ref>{{cite book |author=Hackett Fischer, David |title=The Great Wave |publisher=Oxford University Press |year= 1996|page=81 |isbn=0-19-512121-X}}</ref>

== Measures ==
{{see also|Consumer price index}}
[[File:Inflation data.webp|thumb|300px|right|[[producer price index|PPI]] is a [[leading indicator]], CPI and PCE [[Latency (engineering)|lag]]<ref>{{cite web | url=https://www.yahoo.com/now/does-producer-price-index-tell-190327824.html | title=What Does the Producer Price Index Tell You? | access-date=October 1, 2022 | archive-date=December 25, 2021 | archive-url=https://web.archive.org/web/20211225183858/https://www.yahoo.com/now/does-producer-price-index-tell-190327824.html | url-status=live }}</ref>
{{legend-line|#00A2FF solid 3px|[[producer price index|PPI]]}}
{{legend-line|#61D836 solid 3px|Core PPI}}
{{legend-line|#929292 solid 3px|[[Consumer price index|CPI]]}}
{{legend-line|#F8BA00 solid 3px|[[Core inflation|Core]] CPI}}
{{legend-line|#FF2600 solid 3px|[[Personal consumption expenditures price index|PCE]]}}
{{legend-line|#D41876 solid 3px|Core PCE}}]]
Given that there are many possible measures of the price level, there are many possible measures of price inflation. Most frequently, the term "inflation" refers to a rise in a broad price index representing the overall price level for goods and services in the economy. The [[Consumer Price Index]] (CPI), the [[Personal consumption expenditures price index]] (PCEPI) and the [[GDP deflator]] are some examples of broad price indices. However, "inflation" may also be used to describe a rising price level within a narrower set of assets, goods or services within the economy, such as [[commodity|commodities]] (including food, fuel, metals), [[tangible asset]]s (such as real estate), services (such as entertainment and health care), or [[Labour (economics)|labor]]. Although the values of capital assets are often casually said to "inflate," this should not be confused with inflation as a defined term; a more accurate description for an increase in the value of a capital asset is appreciation. The FBI (CCI), the [[Producer Price Index]], and [[Employment Cost Index]] (ECI) are examples of narrow price indices used to measure price inflation in particular sectors of the economy. [[Core inflation]] is a measure of inflation for a subset of consumer prices that excludes food and energy prices, which rise and fall more than other prices in the short term. The [[Federal Reserve Board]] pays particular attention to the core inflation rate to get a better estimate of long-term future inflation trends overall.<ref>{{Cite book |last=Kiley |first=Michael J. |title=Estimating the common trend rate of inflation for consumer prices and consumer prices excluding food and energy prices |work=Finance and Economic Discussion Series |publisher=Federal Reserve Board |url=http://www.federalreserve.gov/pubs/feds/2008/200838/200838pap.pdf |archive-url=https://ghostarchive.org/archive/20221009/http://www.federalreserve.gov/pubs/feds/2008/200838/200838pap.pdf |archive-date=2022-10-09 |url-status=live|access-date= May 13, 2015 }}</ref>

The inflation rate is most widely calculated by determining the movement or change in a price index, typically the [[consumer price index]].<ref>''See:''
* {{harvnb|Hall|Taylor|1993}};
* {{harvnb|Blanchard|2000}};
The consumer price index measures movements in prices of a fixed basket of goods and services purchased by a "typical consumer".</ref>
The inflation rate is the percentage change of a price index over time. The [[Retail Prices Index]] is also a measure of inflation that is commonly used in the United Kingdom. It is broader than the CPI and contains a larger basket of goods and services.

Given the recent high inflation, the RPI is indicative of the experiences of a wide range of household types, particularly low-income households.<ref>{{Cite journal |last1=Carruthers |first1=A. G. |last2=Sellwood |first2=D. J. |last3=Ward |first3=P. W. |title=Recent Developments in the Retail Prices Index |url=https://www.jstor.org/stable/2987492 |journal=Journal of the Royal Statistical Society. Series D (The Statistician) |volume=29 |issue=1 |pages=1–32 |doi=10.2307/2987492 |jstor=2987492 |issn=0039-0526 |access-date=June 9, 2022 |archive-date=June 9, 2022 |archive-url=https://web.archive.org/web/20220609045128/https://www.jstor.org/stable/2987492 |url-status=live }}</ref>

To illustrate the method of calculation, in January 2007, the U.S. Consumer Price Index was 202.416, and in January 2008 it was 211.080. The formula for calculating the annual percentage rate inflation in the CPI over the course of the year is: <math>\left(\frac{211.080-202.416}{202.416}\right)\times100\%=4.28\%</math>
The resulting inflation rate for the CPI in this one-year period is 4.28%, meaning the general level of prices for typical U.S. consumers rose by approximately four percent in 2007.<ref>The numbers reported here refer to the US Consumer Price Index for All Urban Consumers, All Items, series CPIAUCNS, from base level 100 in base year 1982. They were downloaded from the FRED database at the [[Federal Reserve Bank of St. Louis]] on August 8, 2008.</ref>

Other widely used price indices for calculating price inflation include the following:
* '''[[Producer price index|Producer price indices]]''' (PPIs) which measures average changes in prices received by domestic producers for their output. This differs from the CPI in that price subsidization, profits, and taxes may cause the amount received by the producer to differ from what the consumer paid. There is also typically a delay between an increase in the PPI and any eventual increase in the CPI. Producer price index measures the pressure being put on producers by the costs of their raw materials. This could be "passed on" to consumers, or it could be absorbed by profits, or offset by increasing productivity. In India and the United States, an earlier version of the PPI was called the [[Wholesale price index]].
* '''[[Commodity price index|Commodity price indices]]''', which measure the price of a selection of commodities. In the present commodity price indices are weighted by the relative importance of the components to the "all in" cost of an employee.
* '''[[Core inflation|Core price indices]]''': because food and oil prices can change quickly due to changes in [[supply and demand]] conditions in the food and oil markets, it can be difficult to detect the long run trend in price levels when those prices are included. Therefore, most [[List of national and international statistical services|statistical agencies]] also report a measure of 'core inflation', which removes the most volatile components (such as food and oil) from a broad price index like the CPI. Because core inflation is less affected by short run supply and demand conditions in specific markets, [[central bank]]s rely on it to better measure the inflationary effect of current [[monetary policy]].

Other common measures of inflation are:
* '''[[GDP deflator]]''' is a measure of the price of all the goods and services included in gross domestic product (GDP). The [[US Commerce Department]] publishes a deflator series for US GDP, defined as its nominal GDP measure divided by its real GDP measure.

∴ <math>\mbox{GDP Deflator} = \frac{\mbox{Nominal GDP}}{\mbox{Real GDP}}</math>
* '''Regional inflation''' The Bureau of Labor Statistics breaks down CPI-U calculations down to different regions of the US.
* '''Historical inflation''' Before collecting consistent econometric data became standard for governments, and for the purpose of comparing absolute, rather than relative standards of living, various economists have calculated imputed inflation figures. Most inflation data before the early 20th century is imputed based on the known costs of goods, rather than compiled at the time. It is also used to adjust for the differences in real standard of living for the presence of technology.
* '''[[Asset price inflation]]''' is an undue increase in the prices of real assets, such as real estate.

=== Issues in measuring ===

Measuring inflation in an economy requires objective means of differentiating changes in nominal prices on a common set of goods and services, and distinguishing them from those price shifts resulting from changes in value such as volume, quality, or performance. For example, if the price of a can of corn changes from $0.90 to $1.00 over the course of a year, with no change in quality, then this price difference represents inflation. This single price change would not, however, represent general inflation in an overall economy. Overall inflation is measured as the price change of a large "basket" of representative goods and services. This is the purpose of a [[price index]], which is the combined price of a "basket" of many goods and services. The combined price is the sum of the weighted prices of items in the "basket". A weighted price is calculated by multiplying the [[unit price]] of an item by the number of that item the average consumer purchases. Weighted pricing is necessary to measure the effect of individual unit price changes on the economy's overall inflation. The [[Consumer Price Index]], for example, uses data collected by surveying households to determine what proportion of the typical consumer's overall spending is spent on specific goods and services, and weights the average prices of those items accordingly. Those weighted average prices are combined to calculate the overall price. To better relate price changes over time, indexes typically choose a "base year" price and assign it a value of 100. Index prices in subsequent years are then expressed in relation to the base year price.<ref name=Taylor /> While comparing inflation measures for various periods one has to take into consideration the [[Base effect (inflation)|base effect]] as well.

Inflation measures are often modified over time, either for the relative weight of goods in the basket, or in the way in which goods and services from the present are compared with goods and services from the past. Basket weights are updated regularly, usually every year, to adapt to changes in consumer behavior. Sudden changes in consumer behavior can still introduce a weighting bias in inflation measurement. For example, during the COVID-19 pandemic it has been shown that the basket of goods and services was no longer representative of consumption during the crisis, as numerous goods and services could no longer be consumed due to government containment measures ("lock-downs").<ref>{{cite journal |last1=Benchimol |first1=Jonathan |last2=Caspi |first2=Itamar |last3=Levin |first3=Yuval |title=The COVID-19 Inflation Weighting in Israel |url=https://doi.org/10.1515/ev-2021-0023 |journal=The Economists' Voice |volume=19 |issue=1 |pages=5–14 |doi=10.1515/ev-2021-0023 |s2cid=245497122 |access-date=2023-03-22}}</ref><ref>{{Cite journal|last=Seiler|first=Pascal|title=Weighting bias and inflation in the time of COVID-19: evidence from Swiss transaction data|url=https://doi.org/10.1186/s41937-020-00057-7|journal=Swiss Journal of Economics and Statistics|volume=156|issue=1|pages=13|doi=10.1186/s41937-020-00057-7|issn=2235-6282|pmc=7493696|pmid=32959014}}</ref>

Over time, adjustments are also made to the type of goods and services selected to reflect changes in the sorts of goods and services purchased by 'typical consumers'. New products may be introduced, older products disappear, the quality of existing products may change, and consumer preferences can shift. Both the sorts of goods and services which are included in the "basket" and the weighted price used in inflation measures will be changed over time to keep pace with the changing marketplace.{{Citation needed}} Different segments of the population may naturally consume different "baskets" of goods and services and may even experience different inflation rates. It is argued that companies have put more innovation into bringing down prices for wealthy families than for poor families.<ref>{{cite news |last1=Botella |first1=Elena |title=That "Inflation Inequality" Report Has a Major Problem |url=https://slate.com/business/2019/11/inflation-inequality-not-about-beer-lettuce.html |access-date=11 November 2019 |work=[[Slate (magazine)|Slate]] |archive-date=November 30, 2021 |archive-url=https://web.archive.org/web/20211130071656/https://slate.com/business/2019/11/inflation-inequality-not-about-beer-lettuce.html |url-status=live }}</ref>

Inflation numbers are often [[seasonally adjusted]] to differentiate expected cyclical cost shifts. For example, home heating costs are expected to rise in colder months, and seasonal adjustments are often used when measuring inflation to compensate for cyclical energy or fuel demand spikes. Inflation numbers may be averaged or otherwise subjected to statistical techniques to remove [[statistical noise]] and [[Volatility (finance)|volatility]] of individual prices.<ref>{{cite journal |last1=Vavra |first1=Joseph |title=Inflation Dynamics and Time-Varying Volatility: New Evidence and an SS Interpretation |url=https://academic.oup.com/qje/article-abstract/129/1/215/1897034 |journal=The Quarterly Journal of Economics |volume=129 |issue=1 |pages=215–258 |doi= 10.1093/qje/qjt027 |access-date=2023-03-22}}</ref><ref>{{Cite journal |last=Arlt |first=Josef |title=The problem of annual inflation rate indicator |url=https://onlinelibrary.wiley.com/doi/full/10.1002/ijfe.2563 |journal=International Journal of Finance & Economics |pages=1–17|doi=10.1002/ijfe.2563 |s2cid=233675877 }}</ref>

When looking at inflation, economic institutions may focus only on certain kinds of prices, or ''special indices'', such as the [[core inflation]] index which is used by central banks to formulate [[monetary policy]].<ref>{{Cite web|url=https://www.investopedia.com/terms/c/coreinflation.asp|title=Why Core Inflation is Important|last=Kenton|first=Will|website=Investopedia|language=en|access-date=2020-01-17|archive-date=December 14, 2021|archive-url=https://web.archive.org/web/20211214063705/https://www.investopedia.com/terms/c/coreinflation.asp|url-status=live}}</ref>

Most inflation indices are calculated from weighted averages of selected price changes. This necessarily introduces distortion, and can lead to legitimate disputes about what the true inflation rate is. This problem can be overcome by including all available price changes in the calculation, and then choosing the [[median]] value.<ref>{{cite web |url=http://www.clevelandfed.org/Research/commentary/1991/1201.pdf |title=Median Price Changes: An Alternative Approach to Measuring Current Monetary Inflation |access-date=May 21, 2011 |url-status=dead |archive-url=https://web.archive.org/web/20110515145028/http://www.clevelandfed.org/Research/commentary/1991/1201.pdf |archive-date=May 15, 2011 |df=mdy-all }}</ref> In some other cases, governments may intentionally report false inflation rates; for instance, during the presidency of [[Cristina Kirchner]] (2007–2015) the [[government of Argentina]] was criticised for manipulating economic data, such as inflation and GDP figures, for political gain and to reduce payments on its inflation-indexed debt.<ref>{{cite news |url=https://www.reuters.com/article/us-imf-argentina-idUSBRE91019920130202 |title=IMF reprimands Argentina for inaccurate economic data |newspaper=Reuters |access-date=February 2, 2013 |last1=Wroughton |first1=Lesley |archive-date=August 4, 2021 |archive-url=https://web.archive.org/web/20210804134926/https://www.reuters.com/article/us-imf-argentina-idUSBRE91019920130202 |url-status=live }}</ref><ref>{{cite news |url=https://www.bloomberg.com/news/2013-02-01/argentina-becomes-first-nation-censured-by-imf-on-inflation-data.html |title=Argentina Becomes First Nation Censured by IMF on Economic Data |newspaper=Bloomberg.com |access-date=February 2, 2013 |archive-date=March 10, 2021 |archive-url=https://web.archive.org/web/20210310235820/http://www.bloomberg.com/news/2013-02-01/argentina-becomes-first-nation-censured-by-imf-on-inflation-data.html |url-status=live }}</ref>

===Inflation expectations===

Inflation expectations or expected inflation is the rate of inflation that is anticipated for some time in the foreseeable future. There are two major approaches to modeling the formation of inflation expectations. [[Adaptive expectations]] models them as a weighted average of what was expected one period earlier and the actual rate of inflation that most recently occurred. [[Rational expectations]] models them as unbiased, in the sense that the expected inflation rate is not systematically above or systematically below the inflation rate that actually occurs.

A long-standing survey of inflation expectations is the University of Michigan survey.<ref>{{cite web|url=https://fred.stlouisfed.org/series/MICH|title=University of Michigan: Inflation Expectation|publisher=Economic Research, Federal Reserve Bank of St. Louis|access-date=March 9, 2017|archive-date=November 7, 2021|archive-url=https://web.archive.org/web/20211107075130/https://fred.stlouisfed.org/series/MICH|url-status=live}}</ref>

Inflation expectations affect the economy in several ways. They are more or less built into [[nominal interest rate]]s, so that a rise (or fall) in the expected inflation rate will typically result in a rise (or fall) in nominal interest rates, giving a smaller effect if any on [[real interest rate]]s. In addition, higher expected inflation tends to be built into the rate of wage increases, giving a smaller effect if any on the changes in [[real wages]]. Moreover, the response of inflationary expectations to monetary policy can influence the division of the effects of policy between inflation and unemployment (see [[Monetary policy credibility]]).

== Causes ==

Historically, a great deal of economic literature was concerned with the question of what causes inflation and what effect it has. There were different schools of thought as to the causes of inflation; most historical theories can be divided into two broad areas: ''quality'' theories of inflation and ''quantity'' theories of inflation. The quality theory of inflation rests on the expectation of a seller accepting currency to be able to exchange that currency at a later time for goods they desire as a buyer.

In the late twentieth century, there was broad agreement among economists that in the long run, the inflation rate depends on the growth rate of the money supply relative to the growth of real income. This view, called the [[quantity theory of money]], was accepted as an accurate explanation of inflation in the long run. Consequently, however, in the short and medium term inflation may be affected by supply and demand pressures in the economy, and influenced by the relative elasticity of wages, prices and interest rates.<ref name="federalreserve2004">{{Cite web|url=https://www.ecb.europa.eu/press/pressconf/2004/html/is040701.en.html|archive-url=https://web.archive.org/web/20150812054831/http://www.federalreserve.gov/boarddocs/hh/2004/july/testimony.htm |url-status=dead |title=Introductory statement to the press conference|archive-date=August 12, 2015|website=European Central Bank}}</ref>

The question of whether the short-term effects last long enough to be important is the central topic of debate between monetarist and Keynesian economists. In [[monetarism]] prices and wages adjust quickly enough to make other factors merely marginal behavior on a general trend-line. In the [[Keynesian economics|Keynesian]] view, interest rates, prices, and wages adjust at different rates, and these differences have enough effects on real output to be "long term" in the view of people in an economy.

=== Keynesian view ===
{{see|Keynesian Revolution}}
{{see|Keynes's theory of wages and prices}}
[[Keynesian economics]] proposes that changes in the money supply do not directly affect prices in the short run, and that visible inflation is the result of demand pressures in the economy expressing themselves in prices.

There are three major sources of inflation, as part of what [[Robert J. Gordon]] calls the "[[triangle model]]":<ref>Robert J. Gordon (1988), ''Macroeconomics: Theory and Policy'', 2nd ed., Chap. 22.4, 'Modern theories of inflation'. McGraw-Hill.</ref>
* ''[[Demand-pull inflation]]'' is caused by increases in aggregate demand due to increased private and government spending,<ref name="Biden Is Clueless About Inflation – Reason – Nick Gillespie & Regan Taylor reporting">{{cite web |last1=Gillespie |first1=Nick |last2=Taylor |first2=Regan |title=Biden Is Clueless About Inflation |url=https://reason.com/video/2022/04/01/biden-is-clueless-about-inflation/ |website=reason.com |publisher=Reason |access-date=4 April 2022 |archive-date=April 27, 2022 |archive-url=https://web.archive.org/web/20220427225435/https://reason.com/video/2022/04/01/biden-is-clueless-about-inflation/ |url-status=live }}</ref><ref name="Blame Insane Government Spending for Inflation – Reason – Veronique De Rugy">{{cite web |last1=De Rugy |first1=Veronique |title=Blame Insane Government Spending for Inflation |url=https://reason.com/2022/03/31/blame-insane-government-spending-for-inflation/ |website=reason.com |publisher=Reason |access-date=4 April 2022 |archive-date=May 11, 2022 |archive-url=https://web.archive.org/web/20220511170305/https://reason.com/2022/03/31/blame-insane-government-spending-for-inflation/ |url-status=live }}</ref> etc. Demand inflation encourages economic growth since the excess demand and favourable market conditions will stimulate investment and expansion.
* ''[[Cost-push inflation]]'', also called "supply shock inflation," is caused by a drop in aggregate supply (potential output). This may be due to natural disasters, war or increased prices of inputs. For example, a sudden decrease in the supply of oil, leading to increased oil prices, can cause cost-push inflation. Producers for whom oil is a part of their costs could then pass this on to consumers in the form of increased prices. Another example stems from unexpectedly high insured losses, either legitimate (catastrophes) or fraudulent (which might be particularly prevalent in times of recession). High inflation can prompt employees to demand rapid wage increases, to keep up with consumer prices. In the cost-push theory of inflation, rising wages in turn can help fuel inflation. In the case of collective bargaining, wage growth will be set as a function of inflationary expectations, which will be higher when inflation is high. This can cause a [[price/wage spiral|wage spiral]].<ref>{{cite web|url=https://www.britannica.com/EBchecked/topic/287700/inflation/3512/The-cost-push-theory|title=Encyclopædia Britannica|access-date=September 13, 2014|archive-date=September 7, 2014|archive-url=https://web.archive.org/web/20140907030214/http://www.britannica.com/EBchecked/topic/287700/inflation/3512/The-cost-push-theory/|url-status=live}}</ref> In a sense, inflation begets further inflationary expectations, which beget further inflation.
* [[Built-in inflation]] is induced by [[adaptive expectations]], and is often linked to the "[[price/wage spiral]]". It involves workers trying to keep their wages up with prices (above the rate of inflation), and firms passing these higher labor costs on to their customers as higher prices, leading to a feedback loop. Built-in inflation reflects events in the past, and so might be seen as [[hangover inflation]].

[[Demand-pull theory]] states that inflation accelerates when [[aggregate demand]] increases beyond the ability of the economy to produce (its [[potential output]]). Hence, any factor that increases aggregate demand can cause inflation.<ref>{{cite book |last1=O'Sullivan |first1=Arthur |author-link1=Arthur O'Sullivan (economist) |last2=Sheffrin |first2=Steven M. |title=Economics: Principles in Action |edition=2nd |series=The Wall Street Journal:Classroom Edition |year=2003 |orig-year= 2002|publisher= Pearson Prentice Hall: Addison Wesley Longman|location=Upper Saddle River, New Jersey |isbn=0-13-063085-3 |page= 341}}</ref> However, in the long run, aggregate demand can be held above productive capacity only by increasing the quantity of money in circulation faster than the real growth rate of the economy. Another (although much less common) cause can be a rapid decline in the ''demand'' for money, as happened in Europe during the [[Black Death]], or in the [[Greater East Asia Co-Prosperity Sphere|Japanese occupied territories]] just before the defeat of Japan in 1945.

The effect of money on inflation is most obvious when governments finance spending in a crisis, such as a civil war, by printing money excessively. This sometimes leads to [[hyperinflation]], a condition where prices can double in a month or even daily.<ref>{{cite web |last1=Hanke |first1=Steve H.|language=en |title=World Hyperinflations |url=https://www.cato.org/sites/cato.org/files/pubs/pdf/hanke-krus-hyperinflation-table-may-2013.pdf |archive-url=https://ghostarchive.org/archive/20221009/https://www.cato.org/sites/cato.org/files/pubs/pdf/hanke-krus-hyperinflation-table-may-2013.pdf |archive-date=2022-10-09 |url-status=live }}</ref> The money supply is also thought to play a major role in determining moderate levels of inflation, although there are differences of opinion on how important it is. For example, [[Monetarism|monetarist]] economists believe that the link is very strong; Keynesian economists, by contrast, typically emphasize the role of [[aggregate demand]] in the economy rather than the money supply in determining inflation. That is, for Keynesians, the money supply is only one determinant of aggregate demand.

Some Keynesian economists also disagree with the notion that central banks fully control the money supply, arguing that central banks have little control, since the money supply adapts to the demand for bank credit issued by commercial banks. This is known as the theory of [[endogenous money]], and has been advocated strongly by [[post-Keynesian]]s as far back as the 1960s. This position is not universally accepted{{snd}}banks create money by making loans, but the aggregate volume of these loans diminishes as real interest rates increase. Thus, central banks can influence the money supply by making money cheaper or more expensive, thus increasing or decreasing its production.

A fundamental concept in inflation analysis is the relationship between inflation and unemployment, called the [[Phillips curve]]. This model suggests that there is a [[trade-off]] between [[price stability]] and employment. Therefore, some level of inflation could be considered desirable to minimize unemployment. The Phillips curve model described the U.S. experience well in the 1960s but failed to describe the [[1973–75 recession|stagflation experienced in the 1970s]]. Thus, modern [[macroeconomics]] describes inflation using a Phillips curve that is able to shift due to such matters as supply shocks and structural inflation. The former refers to such events like the [[1973 oil crisis]], while the latter refers to the [[price/wage spiral]] and [[Adaptive expectations|inflationary expectations]] implying that inflation is the new normal. Thus, the Phillips curve represents only the demand-pull component of the triangle model.

Another concept of note is the [[potential output]] (sometimes called the "natural gross domestic product"), a level of GDP, where the economy is at its optimal level of production given institutional and natural constraints. (This level of output corresponds to the Non-Accelerating Inflation Rate of Unemployment, [[NAIRU]], or the "natural" rate of [[unemployment]] or the full-employment unemployment rate.) If GDP exceeds its potential (and unemployment is below the NAIRU), the theory says that inflation will ''accelerate'' as suppliers increase their prices and built-in inflation worsens. If GDP falls below its potential level (and unemployment is above the NAIRU), inflation will ''decelerate'' as suppliers attempt to fill excess capacity, cutting prices and undermining built-in inflation.<ref>{{cite journal | last = Coe | first = David T. | title = Nominal Wages. The NAIRU and Wage Flexibility | publisher = Organisation for Economic Co-operation and Development (OECD) | url = http://www.oecd.org/dataoecd/59/19/33917832.pdf | year = 1985 | id = MPRA Paper 114295 | journal = OECD Economic Studies | issue = 5 | pages = 87–126 | s2cid = 18879396 | access-date = February 24, 2010 | archive-date = February 26, 2018 | archive-url = https://web.archive.org/web/20180226211933/http://www.oecd.org/dataoecd/59/19/33917832.pdf | url-status = live }}</ref>

However, one problem with this theory for policy-making purposes is that the exact level of potential output (and of the NAIRU) is generally unknown and tends to change over time. Inflation also seems to act in an asymmetric way, rising more quickly than it falls. It can change because of policy: for example, high unemployment under British Prime Minister [[Margaret Thatcher]] might have led to a rise in the NAIRU (and a fall in potential) because many of the unemployed found themselves as [[Structural unemployment|structurally unemployed]], unable to find jobs that fit their skills. A rise in structural unemployment implies that a smaller percentage of the labor force can find jobs at the NAIRU, where the economy avoids crossing the threshold into the realm of accelerating inflation.

==== Unemployment ====

A connection between inflation and unemployment has been drawn since the emergence of large scale unemployment in the 19th century, and connections continue to be drawn today. However, the [[unemployment rate]] generally only affects inflation in the short-term but not the long-term.<ref name=chang>Chang, R. (1997) [https://www.frbatlanta.org/filelegacydocs/ACFC7.pdf "Is Low Unemployment Inflationary?"] {{webarchive|url=https://web.archive.org/web/20131113212953/https://www.frbatlanta.org/filelegacydocs/ACFC7.pdf }} ''Federal Reserve Bank of Atlanta Economic Review'' 1Q97:4–13</ref> In the long term, the [[velocity of money]] is far more predictive of inflation than low unemployment.<ref name=hossfeld>Oliver Hossfeld (2010) [http://www.hhl.de/fileadmin/texte/publikationen/forschungspapiere/HOSSFELD_USMONEY_INFERWP_2010-4.pdf "US Money Demand, Monetary Overhang, and Inflation Prediction"] {{Webarchive|url=https://web.archive.org/web/20131113215511/http://www.hhl.de/fileadmin/texte/publikationen/forschungspapiere/HOSSFELD_USMONEY_INFERWP_2010-4.pdf }} ''International Network for Economic Research'' working paper no. 2010.4</ref>

In [[Marxian economics]], the unemployed serve as a [[reserve army of labor]], which restrain wage inflation. In the 20th century, similar concepts in Keynesian economics include the [[NAIRU]] (Non-Accelerating Inflation Rate of Unemployment) and the [[Phillips curve]].

==== Profiteering under consolidation ====

[[File:USprofitsVsCPIchange.png|thumb|U.S. corporate profits as a proportion of GDP (blue) and year-over-year change in the Consumer Price Index (red) 2017-2022]]

Keynesian price inelasticity can contribute to inflation when [[Consolidation (business)|firms consolidate]], tending to support [[monopoly]] or [[monopsony]] conditions anywhere along the [[supply chain]] for goods or services. When this occurs, firms can provide greater [[shareholder value]] by taking a larger proportion of [[Profit (accounting)|profits]] than by investing in providing greater volumes of their outputs.<ref name="Mankiw7partV">{{cite book |last1=Mankiw |first1=N. Gregory |title=Principles of economics |location=Stamford, CT |isbn=978-1285165875 |pages=257–367 |edition=Seventh |chapter=Part V, chapters 13-17}}</ref><ref name="BivinsEpi22">{{cite web |last1=Bivins |first1=Josh |title=Corporate profits have contributed disproportionately to inflation. How should policymakers respond? |url=https://www.epi.org/blog/corporate-profits-have-contributed-disproportionately-to-inflation-how-should-policymakers-respond/ |website=Economic Policy Institute |access-date=25 May 2022 |archive-date=May 25, 2022 |archive-url=https://web.archive.org/web/20220525111507/https://www.epi.org/blog/corporate-profits-have-contributed-disproportionately-to-inflation-how-should-policymakers-respond/ |url-status=live }}</ref>

[[File:OilVsGasoline1Q22.png|thumb|US prices of crude oil and gasoline in February and March, 2022]]

Examples include the rise in gasoline and other fossil fuel prices in the first quarter of 2022. Shortly after initial energy price shocks caused by the [[2022 Russian invasion of Ukraine]] subsided, oil companies found that supply chain constrictions, already exacerbated by the ongoing global [[COVID-19 pandemic]], supported price inelasticity, i.e., they began lowering prices to match the [[price of oil]] when it fell much more slowly than they had increased their prices when costs rose.<ref>{{cite news |last1=Cronin |first1=Brittany |title=The good times are rolling for Big Oil. 3 things to know about their surging profits |url=https://www.npr.org/2022/05/07/1097177459/big-oil-exxon-earnings-gasoline-prices-crude |access-date=25 May 2022 |work=NPR |language=en |archive-date=May 21, 2022 |archive-url=https://web.archive.org/web/20220521123900/https://www.npr.org/2022/05/07/1097177459/big-oil-exxon-earnings-gasoline-prices-crude |url-status=live }}</ref> California's five largest gasoline companies, [[Chevron Corporation]], [[Marathon Petroleum]], [[Valero Energy]], [[PBF Energy]], and [[Phillips 66]], responsible for 96% of transportation fuel sold in the state, all participated in this behavior, reaping first quarter profits much larger than any of their quarterly results in the previous several years.<ref>{{cite news |last1=Elias |first1=Thomas |title=All doubt has been removed, oil companies are gouging us |work=Pennensula News |issue=150 |publisher=Bay Area News Group |page=6 |url=https://napavalleyregister.com/opinion/columnists/thomas-d-elias-doubt-removed-oil-refiners-gouging-us/article_365dae0c-d7c3-11ec-948e-bfc2c65051fe.html |access-date=May 25, 2022 |archive-date=May 26, 2022 |archive-url=https://web.archive.org/web/20220526145052/https://napavalleyregister.com/opinion/columnists/thomas-d-elias-doubt-removed-oil-refiners-gouging-us/article_365dae0c-d7c3-11ec-948e-bfc2c65051fe.html |url-status=live }}</ref> On May 19, 2022, the U.S. House of Representatives passed a bill to prevent such "[[price gouging]]" by addressing the resulting [[windfall profits]], but it is unlikely to prevail against the minority filibuster challenge in the Senate.<ref>{{cite news |last1=Matthew |first1=Daly |title=House approves bill to combat gasoline 'price gouging' |url=https://www.pbs.org/newshour/amp/economy/house-approves-bill-to-combat-gasoline-price-gouging |access-date=25 May 2022 |work=PBS NewsHour |agency=Associated Press |language=en |archive-date=May 21, 2022 |archive-url=https://web.archive.org/web/20220521194012/https://www.pbs.org/newshour/amp/economy/house-approves-bill-to-combat-gasoline-price-gouging |url-status=live }}</ref>

Similarly in the first quarter of 2022, meatpacking giant [[Tyson Foods]] relied on downward price inelasticity in packaged chicken and related products to increase their profits to about $500 million, responding to a $1.5 billion increase in their costs with almost $2 billion in price hikes. Tyson's three main competitors, having essentially no ability to compete on lower prices because supply chain constriction would not support an increase in volumes, followed suit. Tyson's quarter was one of their most profitable, expanding their [[operating margin]] 38%.<ref>{{cite news |last1=Gardner |first1=Eric |title=There's a Price Gouging Smoking Gun In Tyson's Earnings Report |url=https://perfectunion.us/tyson-foods-price-gouging/ |access-date=25 May 2022 |work=More Perfect Union |language=en |archive-date=May 19, 2022 |archive-url=https://web.archive.org/web/20220519165351/https://perfectunion.us/tyson-foods-price-gouging/ |url-status=live }}</ref> [[UBS#Global Wealth Management|UBS Global Wealth Management]] chief economist [[Paul Donovan (economist)|Paul Donovan]] said this has happened because post-pandemic household balance sheets have kept [[consumer spending]] demand strong enough to encourage producers to raise prices faster than costs, and because consumers have been gullible enough to find exaggerated narratives justifying such price hikes plausible.<ref>{{cite news |last1=Donovan |first1=Paul |title=Fed should make clear that rising profit margins are spurring inflation |url=https://www.ft.com/content/837c3863-fc15-476c-841d-340c623565ae |access-date=12 February 2023 |work=Financial Times }}</ref>

==== Effect of economic growth ====

If economic growth matches the growth of the money supply, inflation should not occur when all else is equal.<ref>{{Cite journal |first= Miguel |last= Sigrauski |title= Inflation and Economic Growth |journal= Journal of Political Economy |year= 1961|volume= 75 |issue= 6 |pages= 796–810 |doi= 10.1086/259360|citeseerx= 10.1.1.330.9556 |s2cid= 153472492 }}</ref> A large variety of factors can affect the rate of both. For example, investment in market production, infrastructure, education, and [[preventive health care]] can all grow an economy in greater amounts than the investment spending.<ref>{{Cite journal |first= David R. |last= Henderson |year= 1999 |title= Does Growth Cause Inflation? |url= https://www.cato.org/policy-report/novemberdecember-1999/does-growth-cause-inflation |journal= Cato Policy Report |volume= 21 |access-date= May 22, 2017 |archive-date= December 26, 2020 |archive-url= https://web.archive.org/web/20201226042437/https://www.cato.org/policy-report/novemberdecember-1999/does-growth-cause-inflation |url-status= live }}</ref><ref>{{cite news|url=https://www.nytimes.com/interactive/2011/01/02/business/20110102-metrics-graphic.html?_r=0|title=In Investing, It's When You Start And When You Finish|newspaper=New York Times|access-date=August 22, 2017|archive-date=October 17, 2017|archive-url=https://web.archive.org/web/20171017114954/http://www.nytimes.com/interactive/2011/01/02/business/20110102-metrics-graphic.html?_r=0|url-status=live}}</ref>

=== Monetarist view ===
[[File:CPI 1914-2022.webp|thumb|alt=CPI 1914-2022|261px|
{{legend|#0076BA |Inflation}}
{{legend|#EE220C |[[Deflation]]}}
{{legend-line|#1DB100 solid 3px|[[Money supply|M2 money supply]] increases Year/Year}}
]]
[[File:M2 and Inflation USA.svg|thumb|right|Inflation and the growth of money supply (M2)]]
{{Further|Monetarism}}

Monetarists believe the most significant factor influencing inflation or deflation is how fast the money supply grows or shrinks. They consider fiscal policy, or government spending and taxation, as ineffective in controlling inflation.<ref>{{cite book |author=Lagassé, Paul |title=The Columbia Encyclopedia |publisher=Columbia University Press |location=New York |year=2000 |chapter=Monetarism |isbn=0-7876-5015-3 |edition=6th |url-access=registration |url=https://archive.org/details/columbiaencyclop00laga }}</ref> The monetarist economist [[Milton Friedman]] famously stated, ''"Inflation is always and everywhere a monetary phenomenon."''<ref>{{cite book|first1=Milton|last1= Friedman|first2=Anna Jacobson |last2=Schwartz|title=A Monetary History of the United States, 1867–1960|url=https://archive.org/details/monetaryhistoryo00frie|url-access=registration|year=1963|publisher=Princeton University Press}}</ref>

Monetarists assert that the empirical study of monetary history shows that inflation has always been a monetary phenomenon. The quantity theory of money, simply stated, says that any change in the amount of money in a system will change the price level. This theory begins with the [[equation of exchange]]:

:<math>MV = PQ</math>
where
:<math>M</math> is the nominal quantity of money;
:<math>V</math> is the [[velocity of money]] in final expenditures;
:<math>P</math> is the general price level;
:<math>Q</math> is an index of the [[real versus nominal value (economics)|real value]] of final expenditures;

In this formula, the general price level is related to the level of real economic activity (''Q''), the quantity of money (''M'') and the velocity of money (''V''). The formula is an identity because the velocity of money (''V'') is defined to be the ratio of final nominal expenditure (<math> PQ </math>) to the quantity of money (''M'').

Monetarists assume that the velocity of money is unaffected by monetary policy (at least in the long run), and the real value of output is determined in the long run by the productive capacity of the economy. Under these assumptions, the primary driver of the change in the general price level is changes in the quantity of money. With exogenous velocity (that is, velocity being determined externally and not being influenced by monetary policy), the money supply determines the value of nominal output (which equals final expenditure) in the short run.

In practice, velocity is not exogenous in the short run, and so the formula does not necessarily imply a stable short-run relationship between the money supply and nominal output. However, in the long run, changes in velocity are assumed to be determined by the evolution of the payments mechanism. If velocity is relatively unaffected by monetary policy, the long-run rate of increase in prices (the inflation rate) is equal to the long-run growth rate of the money supply plus the exogenous long-run rate of velocity growth minus the long run growth rate of real output.<ref name="Mankiw 2002 pp=81–107">{{Harvnb|Mankiw|2002|pp=81–107}}</ref>

=== Rational expectations theory ===

{{Further|Rational expectations theory}}

Rational expectations theory holds that economic actors look rationally into the future when trying to maximize their well-being, and do not respond solely to immediate opportunity costs and pressures. In this view, while generally grounded in monetarism, future expectations and strategies are important for inflation as well.

A core assertion of rational expectations theory is that actors will seek to "head off" central-bank decisions by acting in ways that fulfill predictions of higher inflation. This means that central banks must establish their credibility in fighting inflation, or economic actors will make bets that the central bank will expand the money supply rapidly enough to prevent recession, even at the expense of exacerbating inflation. Thus, if a central bank has a reputation as being "soft" on inflation, when it announces a new policy of fighting inflation with restrictive monetary growth economic agents will not believe that the policy will persist; their inflationary expectations will remain high, and so will inflation. On the other hand, if the central bank has a reputation of being "tough" on inflation, then such a policy announcement will be believed and inflationary expectations will come down rapidly, thus allowing inflation itself to come down rapidly with minimal economic disruption.

===Heterodox views===

Additionally, there are theories about inflation accepted by economists outside of the [[mainstream economics|mainstream]].

==== Austrian view ====

{{See also|Austrian School|Monetary inflation}}

The [[Austrian School]] stresses that inflation is not uniform over all assets, goods, and services. Inflation depends on differences in markets and on where newly created money and credit enter the economy. [[Ludwig von Mises]] said that inflation should refer to an increase in the quantity of money, that is not offset by a corresponding increase in the need for money, and that price inflation will necessarily follow, always leaving a poorer<ref>{{cite web |last1=Mises |first1=Ludwig von |title=Human Action |url=https://oll.libertyfund.org/quote/ludwig-von-mises-lays-out-five-fundamental-truths-of-monetary-expansion-1949 |website=OLL |access-date=July 17, 2021 |archive-date=September 25, 2021 |archive-url=https://web.archive.org/web/20210925084337/https://oll.libertyfund.org/quote/ludwig-von-mises-lays-out-five-fundamental-truths-of-monetary-expansion-1949 |url-status=live }}</ref> nation.<ref>{{cite book|last=Von Mises|first=Ludwig|title=The Theory of Money and Credit|year=1912|publisher=Yale University Press|page=240|url=https://mises.org/books/tmc.pdf |archive-url=https://ghostarchive.org/archive/20221009/https://mises.org/books/tmc.pdf |archive-date=2022-10-09 |url-status=live|edition=1953|access-date=January 23, 2014|quote=In theoretical investigation there is only one meaning that can rationally be attached to the expression Inflation: an increase in the quantity of money (in the broader sense of the term, so as to include fiduciary media as well), that is not offset by a corresponding increase in the demand for money (again in the broader sense of the term), so that a fall in the objective exchange-value of money must occur.}}</ref><ref name="TheTheory">The Theory of Money and Credit, Mises (1912, [1981], p. 272)</ref>

==== Real bills doctrine ====

{{main|Real bills doctrine}}

The real bills doctrine (RBD) asserts that banks should issue their money in exchange for short-term real bills of adequate value. As long as banks only issue a dollar in exchange for assets worth at least a dollar, the issuing bank's assets will naturally move in step with its issuance of money, and the money will hold its value. Should the bank fail to get or maintain assets of adequate value, then the bank's money will lose value, just as any financial security will lose value if its asset backing diminishes. The real bills doctrine (also known as the backing theory) thus asserts that inflation results when money outruns its issuer's assets. The quantity theory of money, in contrast, claims that inflation results when money outruns the economy's production of goods.

Currency and banking schools of economics argue the RBD, that banks should also be able to issue currency against bills of trading, which is "real bills" that they buy from merchants. This theory was important in the 19th century in debates between "Banking" and "Currency" schools of monetary soundness, and in the formation of the [[Federal Reserve]]. In the wake of the collapse of the international gold standard post 1913, and the move towards deficit financing of government, RBD has remained a minor topic, primarily of interest in limited contexts, such as [[currency board]]s. It is generally held in ill repute today, with [[Frederic Mishkin]], a governor of the [[Federal Reserve]] going so far as to say it had been "completely discredited."

The debate between currency, or quantity theory, and the [[British Banking School|banking schools]] during the 19th century prefigures current questions about the credibility of money in the present. In the 19th century, the banking schools had greater influence in policy in the United States and Great Britain, while the [[British Currency School|currency schools]] had more influence "on the continent", that is in non-British countries, particularly in the [[Latin Monetary Union]] and the [[Scandinavian Monetary Union]].

In 2019, monetary historians [[Thomas M. Humphrey]] and [[Richard H. Timberlake]] published "Gold, the Real Bills Doctrine, and the Fed: Sources of Monetary Disorder 1922–1938".<ref>{{cite book |last1=Humphrey |first1=Thomas M. |last2=Timberlake |first2=Richard H. |title=Gold, the Real Bills Doctrine, and the Fed : sources of monetary disorder 1922–1938 |publisher=Cato Institute |location=Washington, D.C. |isbn=978-1-948647-13-7 |edition=First}}</ref>

== Effects of inflation ==

=== General effect ===
[[File:Restaurant increasing prices by $1.00 due to inflation.jpg|thumb|Restaurant increasing prices by $1.00 due to inflation]]

Inflation is the decrease in the purchasing power of a currency. That is, when the general level of prices rise, each monetary unit can buy fewer goods and services in aggregate. The effect of inflation differs on different sectors of the economy, with some sectors being adversely affected while others benefitting. For example, with inflation, those segments in society which own physical assets, such as property, stock etc., benefit from the price/value of their holdings going up, when those who seek to acquire them will need to pay more for them. Their ability to do so will depend on the degree to which their income is fixed. For example, increases in payments to workers and pensioners often lag behind inflation, and for some people income is fixed. Also, individuals or institutions with cash assets will experience a decline in the purchasing power of the cash. Increases in the price level (inflation) erode the real value of money (the functional currency) and other items with an underlying monetary nature.

Debtors who have debts with a fixed nominal rate of interest will see a reduction in the "real" interest rate as the inflation rate rises. The real interest on a loan is the nominal rate minus the inflation rate. The formula ''R = N-I'' approximates the correct answer as long as both the nominal interest rate and the inflation rate are small. The correct equation is ''r = n/i'' where ''r'', ''n'' and ''i'' are expressed as [[ratio]]s (e.g. 1.2 for +20%, 0.8 for −20%). As an example, when the inflation rate is 3%, a loan with a nominal interest rate of 5% would have a real interest rate of approximately 2% (in fact, it's 1.94%). Any unexpected increase in the inflation rate would decrease the real interest rate. Banks and other lenders adjust for this inflation risk either by including an inflation risk premium to fixed interest rate loans, or lending at an adjustable rate.

=== Negative ===

High or unpredictable inflation rates are regarded as harmful to an overall economy. They add inefficiencies in the market, and make it difficult for companies to budget or plan long-term. Inflation can act as a drag on productivity as companies are forced to shift resources away from products and services to focus on profit and losses from currency inflation.<ref name=Taylor /> Uncertainty about the future purchasing power of money discourages investment and saving.<ref>{{cite journal | title=Personal Savings and Anticipated Inflation | journal=The Economic Journal | last=Bulkley | first=George | volume=91 | issue=361 | pages=124–135 | doi=10.2307/2231702 | jstor=2231702}}</ref> Inflation hurts asset prices such as stock performance in the short-run, as it erodes non-energy corporates' profit margins and leads to central banks' policy tightening measures.<ref>{{Cite web |title=Stock Returns and Inflation Redux: An Explanation from Monetary Policy in Advanced and Emerging Markets |url=https://www.imf.org/en/Publications/WP/Issues/2021/08/20/Stock-Returns-and-Inflation-Redux-An-Explanation-from-Monetary-Policy-in-Advanced-and-463391 |access-date=2023-01-08 |website=IMF |language=en |archive-date=January 8, 2023 |archive-url=https://web.archive.org/web/20230108213505/https://www.imf.org/en/Publications/WP/Issues/2021/08/20/Stock-Returns-and-Inflation-Redux-An-Explanation-from-Monetary-Policy-in-Advanced-and-463391 |url-status=live }}</ref> Inflation can also impose hidden tax increases. For instance, inflated earnings push taxpayers into higher income tax rates unless the tax brackets are indexed to inflation.

With high inflation, purchasing power is redistributed from those on fixed nominal incomes, such as some pensioners whose pensions are not indexed to the price level, towards those with variable incomes whose earnings may better keep pace with the inflation.<ref name=Taylor /> This redistribution of purchasing power will also occur between international trading partners. Where fixed [[exchange rate]]s are imposed, higher inflation in one economy than another will cause the first economy's exports to become more expensive and affect the [[balance of trade]]. There can also be negative effects to trade from an increased instability in currency exchange prices caused by unpredictable inflation.

;[[Hoarding]]: People buy durable and/or non-perishable commodities and other goods as stores of wealth, to avoid the losses expected from the declining purchasing power of money, creating shortages of the hoarded goods.

;Social unrest and revolts: Inflation can lead to massive demonstrations and revolutions. For example, inflation and in particular food inflation is considered one of the main reasons that caused the 2010–11 [[Tunisian revolution]]<ref>"Les Egyptiens souffrent aussi de l'accélération de l'inflation", Céline Jeancourt-Galignani{{snd}} La Tribune, February 10, 2011</ref> and the [[2011 Egyptian revolution]],<ref name="tna">{{Cite news|url=http://www.thenewage.co.za/8894-1007-53-Egypt_protests_a_ticking_time_bomb_Analysts|title=Egypt protests a ticking time bomb: Analysts|author=AFP|publisher=The New Age|access-date=January 29, 2011|url-status=dead|archive-url=https://web.archive.org/web/20110209104208/http://www.thenewage.co.za/8894-1007-53-Egypt_protests_a_ticking_time_bomb_Analysts|archive-date=February 9, 2011|df=mdy-all}}</ref> according to many observers including [[Robert Zoellick]],<ref>"Les prix alimentaires proches de "la cote d'alerte"" – Le Figaro, with AFP, February 20, 2011</ref> president of the [[World Bank]]. Tunisian president [[Zine El Abidine Ben Ali]] was ousted, Egyptian President [[Hosni Mubarak]] was also ousted after only 18 days of demonstrations, and protests soon spread in many countries of North Africa and Middle East.

;[[Hyperinflation]]: If inflation becomes too high, it can cause people to severely curtail their use of the currency, leading to an acceleration in the inflation rate. High and accelerating inflation grossly interferes with the normal workings of the economy, hurting its ability to supply goods. Hyperinflation can lead people to abandon the use of the country's currency in favour of external currencies ([[dollarization]]), as has been reported to have occurred in [[North Korea]]).<ref name="cato">{{Cite news|url=http://www.cato.org/publications/commentary/north-korea-hyperinflation-dollarization|title=North Korea: From Hyperinflation to Dollarization?|author=Steve H. Hanke|access-date=August 21, 2014|archive-date=December 26, 2020|archive-url=https://web.archive.org/web/20201226020043/https://www.cato.org/publications/commentary/north-korea-hyperinflation-dollarization|url-status=live}}</ref>

;[[Allocative efficiency]]: A change in the supply or demand for a good will normally cause its [[relative price]] to change, signaling the buyers and sellers that they should re-allocate resources in response to the new market conditions. But when prices are constantly changing due to inflation, price changes due to genuine relative [[price signal]]s are difficult to distinguish from price changes due to general inflation, so agents are slow to respond to them. The result is a loss of [[economic efficiency|allocative efficiency]].

;[[Shoe leather cost]]: High inflation increases the opportunity cost of holding cash balances and can induce people to hold a greater portion of their assets in interest paying accounts. However, since cash is still needed to carry out transactions this means that more "trips to the bank" are necessary to make withdrawals, proverbially wearing out the "shoe leather" with each trip.

;[[Menu cost]]
[[File:Subway pizza inflation 2022 jeh.jpg|thumb|Low-cost price adjustment]]
: With high inflation, firms must change their prices often to keep up with economy-wide changes. But often changing prices is itself a costly activity whether explicitly, as with the need to print new menus, or implicitly, as with the extra time and effort needed to change prices constantly.

;[[Inflation tax|Tax]]: Inflation serves as a hidden tax on currency holdings.<ref>{{Cite journal|last1=Cooley|first1=Thomas F.|last2=Hansen|first2=Gary D.|title=The Inflation Tax in a Real Business Cycle Model|url=https://www.jstor.org/stable/1827929|journal=The American Economic Review|volume=79|issue=4|pages=733–748|jstor=1827929|issn=0002-8282|access-date=October 7, 2021|archive-date=October 8, 2021|archive-url=https://web.archive.org/web/20211008164402/https://www.jstor.org/stable/1827929|url-status=live}}</ref><ref>{{Cite web|title=Inflation: A Tax on Money Holdings|url=https://www.economics.utoronto.ca/jfloyd/modules/inft.html|access-date=2021-10-07|website=www.economics.utoronto.ca|archive-date=November 11, 2020|archive-url=https://web.archive.org/web/20201111215101/https://www.economics.utoronto.ca/jfloyd/modules/inft.html|url-status=live}}</ref>

=== Positive ===

;Labour-market adjustments: Nominal wages are [[Sticky (economics)|slow to adjust downwards]]. This can lead to prolonged disequilibrium and high unemployment in the labor market. Since inflation allows real wages to fall even if nominal wages are kept constant, moderate inflation enables labor markets to reach equilibrium faster.<ref>{{cite journal |last1=Tobin |first1=James |title=Inflation and Unemployment |url=https://www.jstor.org/stable/1821468 |journal=American Economic Review |volume=62 |issue=1 |pages=1–18 |jstor=1821468 |access-date=2023-03-22}}</ref>

;Room to maneuver: The primary tools for controlling the money supply are the ability to set the [[discount window|discount rate]], the rate at which banks can borrow from the central bank, and [[open market operations]], which are the central bank's interventions into the bonds market with the aim of affecting the nominal interest rate. If an economy finds itself in a recession with already low, or even zero, nominal interest rates, then the bank cannot cut these rates further (since negative nominal interest rates are impossible) to stimulate the economy{{snd}} this situation is known as a [[liquidity trap]].

;Mundell–Tobin effect: According to the Mundell-Tobin effect, an increase in inflation leads to an increase in capital investment, which leads to an increase in growth.<ref>{{Cite web |last=Edwards |first=Jeffrey A. |title=Politics, Inflation, and the Mundell-Tobin Effect |url=https://mpra.ub.uni-muenchen.de/36443/ |access-date=2022-06-09 |website=mpra.ub.uni-muenchen.de |language=en |archive-date=November 1, 2018 |archive-url=https://web.archive.org/web/20181101141711/https://mpra.ub.uni-muenchen.de/36443/ |url-status=live }}</ref> The [[Nobel Memorial Prize in Economic Sciences|Nobel]] laureate [[Robert Mundell]] noted that moderate inflation would induce savers to substitute lending for some money holding as a means to finance future spending. That substitution would cause market clearing real interest rates to fall.<ref>{{cite journal|last=Mundell|first=James|journal=Journal of Political Economy|volume=LXXI|year=1963|pages=280–283 |title=Inflation and Real Interest|issue=3|doi=10.1086/258771|s2cid=153733633}}</ref> The lower real rate of interest would induce more borrowing to finance investment. In a similar vein, Nobel laureate [[James Tobin]] noted that such inflation would cause businesses to substitute investment in [[physical capital]] (plant, equipment, and inventories) for money balances in their asset portfolios. That substitution would mean choosing the making of investments with lower rates of real return. (The rates of return are lower because the investments with higher rates of return were already being made before.)<ref>Tobin, J. Econometrica, Vol. 33, (1965), pp. 671–684 "Money and Economic Growth"</ref> The two related effects are known as the [[Mundell–Tobin effect]]. Unless the economy is already overinvesting according to models of [[Economic growth|economic growth theory]], that extra investment resulting from the effect would be seen as positive.

;Instability with deflation: Economist [[Sho-Chieh Tsiang|S.C. Tsiang]] noted that once substantial deflation is expected, two important effects will appear; both a result of money holding substituting for lending as a vehicle for saving.<ref>{{cite journal |last1=Tsiang |first1=S. C. |title=A Critical Note on the Optimum Supply of Money |journal=Journal of Money, Credit and Banking |volume=1 |issue=2 |pages=266–280 |doi=10.2307/1991274 |jstor=1991274 |url=https://ideas.repec.org/a/mcb/jmoncb/v1y1969i2p266-80.html |language=en |access-date=October 20, 2020 |archive-date=April 25, 2021 |archive-url=https://web.archive.org/web/20210425223335/https://ideas.repec.org/a/mcb/jmoncb/v1y1969i2p266-80.html |url-status=live }}</ref> The first was that continually falling prices and the resulting incentive to hoard money will cause instability resulting from the likely increasing fear, while money hoards grow in value, that the value of those hoards are at risk, as people realize that a movement to trade those money hoards for real goods and assets will quickly drive those prices up. Any movement to spend those hoards "once started would become a tremendous avalanche, which could rampage for a long time before it would spend itself."<ref>Tsiang, 1969 (p. 272)</ref> Thus, a regime of long-term deflation is likely to be interrupted by periodic spikes of rapid inflation and consequent real economic disruptions. The second effect noted by Tsiang is that when savers have substituted money holding for lending on financial markets, the role of those markets in channeling savings into investment is undermined. With nominal interest rates driven to zero, or near zero, from the competition with a high return money asset, there would be no price mechanism in whatever is left of those markets. With financial markets effectively euthanized, the remaining goods and physical asset prices would move in perverse directions. For example, an increased desire to save could not push interest rates further down (and thereby stimulate investment) but would instead cause additional money hoarding, driving consumer prices further down and making investment in consumer goods production thereby less attractive. Moderate inflation, once its expectation is incorporated into nominal interest rates, would give those interest rates room to go both up and down in response to shifting investment opportunities, or savers' preferences, and thus allow financial markets to function in a more normal fashion.

=== Cost-of-living allowance ===

{{See also|Cost of living}}

The real purchasing power of fixed payments is eroded by inflation unless they are inflation-adjusted to keep their real values constant. In many countries, employment contracts, pension benefits, and government entitlements (such as [[social security]]) are tied to a cost-of-living index, typically to the [[consumer price index]].<ref name="cola wars">{{cite web |url=http://www.govexec.com/dailyfed/0906/090806rp.htm |title=COLA Wars |work=Government Executive |publisher=[[National Journal Group]] |access-date=September 23, 2008 |last=Flanagan |first=Tammy |archive-url=https://web.archive.org/web/20081005120234/http://www.govexec.com/dailyfed/0906/090806rp.htm |archive-date=October 5, 2008 |url-status=dead }}</ref> A ''cost-of-living adjustment'' (COLA) adjusts salaries based on changes in a cost-of-living index.<ref>{{Cite web|url=https://www.ssa.gov/oact/cola/colasummary.html|title=Cost-Of-Living Adjustment (COLA)|last=SueKunkel|website=www.ssa.gov|language=en|access-date=2018-05-15|archive-date=November 27, 2021|archive-url=https://web.archive.org/web/20211127155725/https://www.ssa.gov/OACT/COLA/colasummary.html|url-status=live}}</ref> It does not control inflation, but rather seeks to mitigate the consequences of inflation for those on fixed incomes. Salaries are typically adjusted annually in low inflation economies. During hyperinflation they are adjusted more often.<ref name="cola wars" /> They may also be tied to a cost-of-living index that varies by geographic location if the employee moves.

Annual escalation clauses in employment contracts can specify retroactive or future percentage increases in worker pay which are not tied to any index. These negotiated increases in pay are colloquially referred to as cost-of-living adjustments ("COLAs") or cost-of-living increases because of their similarity to increases tied to externally determined indexes.

== Controlling inflation ==

[[File:Federal Funds Rate (effective).svg|thumb|right|The U.S. effective [[federal funds rate]] charted over fifty years]]

===Monetary policy===
{{Main|Monetary policy}}

Monetary policy is the policy enacted by the [[monetary authority|monetary authorities]] (most frequently the [[central bank]] of a nation) to control the [[interest rate]]{{snd}}or equivalently the [[money supply]]{{snd}}so as to control inflation and ensure price stability. Higher interest rates reduce the economy's money supply because fewer people seek loans. When banks make loans, the loan proceeds are generally deposited in bank accounts that are part of the money supply, thereby expanding it. When banks make fewer loans, the amount of bank deposits and hence the money supply decrease. For example, in the early 1980s, when the US [[federal funds rate]] exceeded 15%, the quantity of [[Federal Reserve]] dollars fell 8.1%, from US$8.6 trillion down to $7.9 trillion.

In the latter half of the 20th century, there was debate between [[Keynesian]]s and [[monetarist]]s about the appropriate instrument to use to control inflation. Monetarists emphasize a low and steady growth rate of the money supply, while Keynesians emphasize controlling [[aggregate demand]], by reducing demand during economic expansions and increasing demand during recessions to keep inflation stable. Control of aggregate demand can be achieved by using either monetary policy or [[fiscal policy]] (increasing taxation or reducing government spending to reduce demand). Since the 1980s, most countries have primarily relied on monetary policy to control inflation. When inflation exceeds an acceptable level, the country's central bank increases the interest rate, which tends to slow down economic growth and inflation. Some central banks have a [[symmetrical inflation target]], while others only react when inflation rises above a certain threshold.

In the 21st century, most economists favor a low and steady rate of inflation. In most countries, central banks or other monetary authorities are tasked with keeping interest rates and prices stable, and inflation near a target rate. These [[Inflation targeting|inflation targets]] may be publicly disclosed or not. In most [[OECD|OECD countries]], the inflation target is usually about 2% to 3% (in developing countries like Armenia, the inflation target is higher, at around 4%).<ref>{{Cite web |title=Inflation Reports |url=https://www.cba.am/en/SitePages/mppubl.aspx |access-date=2022-12-06 |website=www.cba.am |archive-date=December 6, 2022 |archive-url=https://web.archive.org/web/20221206004614/https://www.cba.am/en/SitePages/mppubl.aspx |url-status=live }}</ref> Central banks target a low inflation rate because they believe that high inflation is economically costly because it would create uncertainty about differences in [[relative price]]s and about the inflation rate itself. A low positive inflation rate is targeted rather than a zero or negative one because the latter could cause or worsen [[recession]]s;<ref name="econjournalwatch.org"/> low (as opposed to zero or [[Deflation|negative]]) inflation reduces the severity of economic recessions by enabling the labor market to adjust more quickly in a downturn, and reduces the risk that a [[liquidity trap]] prevents monetary policy from stabilizing the economy.<ref name="aeaweb.org"/>

===Other methods===

==== Fixed exchange rates ====

{{Main|Fixed exchange rate}}
Under a fixed exchange rate currency regime, a country's currency is tied in value to another single currency or to a basket of other currencies (or sometimes to another measure of value, such as gold). A fixed exchange rate is usually used to stabilize the value of a currency, vis-a-vis the currency it is pegged to. It can also be used as a means to control inflation. However, as the value of the reference currency rises and falls, so does the currency pegged to it. This essentially means that the inflation rate in the fixed exchange rate country is determined by the inflation rate of the country the currency is pegged to. In addition, a fixed exchange rate prevents a government from using domestic monetary policy to achieve macroeconomic stability.

Under the [[Bretton Woods system|Bretton Woods]] agreement, most countries around the world had currencies that were fixed to the U.S. dollar. This limited inflation in those countries, but also exposed them to the danger of [[speculative attack]]s. After the Bretton Woods agreement broke down in the early 1970s, countries gradually turned to [[floating exchange rates]]. However, in the later part of the 20th century, some countries reverted to a fixed exchange rate as part of an attempt to control inflation. This policy of using a fixed exchange rate to control inflation was used in many countries in South America in the later part of the 20th century (e.g. [[Argentine Currency Board|Argentina (1991–2002)]], Bolivia, Brazil, Chile, etc.). 

==== Gold standard ====

{{Main|Gold standard}}
[[File:Two 20kr gold coins.png|thumb|right|Two 20 [[Swedish krona|krona]] gold coins from the [[Scandinavian Monetary Union]], a historical example of an international gold standard]]

The gold standard is a monetary system in which a region's common medium of exchange is paper notes (or other monetary token) that are normally freely convertible into pre-set, fixed quantities of gold. The standard specifies how the gold backing would be implemented, including the amount of [[Bullion coin|specie]] per currency unit. The currency itself has no ''innate value'', but is accepted by traders because it can be redeemed for the equivalent specie. A [[Silver certificate (United States)|U.S. silver certificate]], for example, could be redeemed for an actual piece of silver.

The gold standard was partially abandoned via the international adoption of the [[Bretton Woods system]]. Under this system all other major currencies were tied at fixed rates to the US dollar, which itself was tied by the US government to gold at the rate of US$35 per ounce. The Bretton Woods system broke down in 1971, causing most countries to switch to [[fiat currency|fiat money]]{{snd}} money backed only by the laws of the country.

Under a gold standard, the long term rate of inflation (or deflation) would be determined by the growth rate of the supply of gold relative to total output.<ref>{{cite encyclopedia|last =Bordo|first =Michael D.|date =2002|url =http://www.econlib.org/library/Enc/GoldStandard.html|title =Gold Standard|encyclopedia =The Concise Encyclopedia of Economics|publisher =Library of Economics and Liberty|access-date =September 23, 2008|archive-date =October 5, 2010|archive-url =https://web.archive.org/web/20101005063134/http://www.econlib.org/library/Enc/GoldStandard.html|url-status =live}}</ref> Critics argue that this will cause arbitrary fluctuations in the inflation rate, and that monetary policy would essentially be determined by gold mining.<ref name="BarskyDeLong">{{cite journal |last1=Barsky |first1=Robert B |first2=J Bradford |last2=DeLong |year=1991 |title=Forecasting Pre-World War I Inflation: The Fisher Effect and the Gold Standard |journal=Quarterly Journal of Economics |volume=106 |issue=3 |pages=815–836 |url=https://ideas.repec.org/a/tpr/qjecon/v106y1991i3p815-36.html |access-date=September 27, 2008 |doi=10.2307/2937928 |jstor=2937928 |archive-date=June 20, 2015 |archive-url=https://web.archive.org/web/20150620163911/https://ideas.repec.org/a/tpr/qjecon/v106y1991i3p815-36.html |url-status=live }}</ref><ref name="DeLong">{{cite web |url=http://www.j-bradford-delong.net/Politics/whynotthegoldstandard.html |title=Why Not the Gold Standard? |last=DeLong |first=Brad |access-date=September 25, 2008 |archive-url=https://web.archive.org/web/20101018035441/http://www.j-bradford-delong.net/politics/whynotthegoldstandard.html |archive-date=October 18, 2010 |url-status=dead }}</ref>

==== Wage and price controls ====

{{See also|Incomes policy}}
Another method attempted in the past have been wage and [[price controls]] ("incomes policies"). Temporary price controls may be used as a complement to other policies to fight inflation; price controls may make disinflation faster, while reducing the need for unemployment to reduce inflation. If price controls are used during a recession, the kinds of distortions that price controls cause may be lessened. However, economists generally advise against the imposition of price controls {{cn}}.

Wage and price controls, in combination with rationing, have been used successfully in wartime environments. However, their use in other contexts is far more mixed. Notable failures of their use include [[Nixon shock|the 1972 imposition of wage and price controls]] by [[Richard Nixon]]. More successful examples include the [[The Accord|Prices and Incomes Accord]] in Australia and the [[Wassenaar Agreement]] in the [[Netherlands]].

In general, wage and price controls are regarded as a temporary and exceptional measures, only effective when coupled with policies designed to reduce the underlying causes of inflation during the [[Wage and price controls|wage and price]] control regime, for example, winning the war being fought. They often have perverse effects, due to the distorted signals they send to the market {{cn}}. Artificially low prices often cause rationing and shortages and discourage future investment, resulting in yet further shortages {{cn}}. The usual economic analysis is that any product or service that is under-priced is overconsumed {{cn}}. For example, if the official price of bread is too low, there will be too little bread at official prices, and too little investment in bread making by the market to satisfy future needs, thereby exacerbating the problem in the long term.

== See also ==

{{cols|colwidth=21em}}
* [[Core inflation]]
* [[Food prices]]
* [[Hyperinflation]]
* [[Indexed unit of account]]
* [[Inflationism]]
* [[Inflation hedge]]
* [[Headline inflation]]
* [[List of countries by inflation rate]]
* [[Measuring economic worth over time]]
* [[Overconsumption]]
* [[Shrinkflation]] and [[Skimpflation]]
* [[Real versus nominal value (economics)]]
* [[Steady-state economy]]
* [[Welfare cost of inflation]]
* [[Supply shock]]
* [[Template:Inflation]] – for price conversions in Bharatpedia articles
{{colend}}

== Notes ==

{{Reflist|30em}}

== References ==

* {{Cite book |last1=Abel |first1=Andrew B. |last2=Bernanke |first2=Ben S. |last3=Croushore |first3=Dean |author-link1=Andrew Abel|author-link2=Ben Bernanke |title=Macroeconomics |publisher=Pearson |year=2005 |edition=5th |isbn=978-0-32119963-8}} Measurement of inflation is discussed in Ch. 2, pp. 45–50; Money growth & Inflation in Ch. 7, pp. 266–269; Keynesian business cycles and inflation in Ch. 9, pp. 308–348.
* {{Cite book |last=Barro |first=Robert J. |author-link =Robert Barro |title=Macroeconomics |publisher=MIT Press |location=Cambridge, MA. |year=1997 |page= 895 |isbn=0-262-02436-5 }}
* {{Cite book |last=Blanchard |first=Olivier |author-link=Olivier Blanchard |title=Macroeconomics |publisher=Prentice Hall |location=Englewood Cliffs, N.J. |year=2000 |isbn=0-13-013306-X |edition=2nd }}
* {{Cite book |last=Mankiw |first=N. Gregory |author-link=Greg Mankiw |title=Macroeconomics |publisher=Worth |year=2002 |edition=5th |isbn=978-0-71675237-0}} Measurement of inflation is discussed in Ch. 2, pp. 22–32; Money growth & Inflation in Ch. 4, pp. 81–107; Keynesian business cycles and inflation in Ch. 9, pp. 238–255.
* {{Cite book |last1=Hall |first1=Robert E. |author-link=Robert Hall (economist) |last2=Taylor |first2=John B. |author-link2=John B. Taylor |title=Macroeconomics |publisher=W.W. Norton |location=New York |year=1993 |page=[https://archive.org/details/macroeconomics00hall/page/637 637] |isbn=0-393-96307-1 |url-access=registration |url=https://archive.org/details/macroeconomics00hall/page/637 }}
* {{Cite book |last1=Burda |first1=Michael C. |author-link=Michael C. Burda |last2=Wyplosz |first2=Charles |title=Macroeconomics: a European text |publisher=[[Oxford University Press]] |location=Oxford [Oxfordshire] |year=1997 |isbn=0-19-877468-0 }}

== Further reading ==

* World Bank, 2018. [https://www.worldbank.org/en/research/publication/inflation-in-emerging-and-developing-economies ''Inflation in Emerging and Developing Economies: Evolution, Drivers and Policies'']. Edited by Jongrim Ha, M. Ayhan Kose, and Franziska Ohnsorge.
* [[Leonardo Auernheimer|Auernheimer, Leonardo]], "The Honest Government's Guide to the Revenue From the Creation of Money," Journal of Political Economy, Vol. 82, No. 3, May/June 1974, pp. 598–606.
* [[William Baumol|Baumol, William J.]] and [[Alan S. Blinder]], ''Macroeconomics: Principles and Policy'', Tenth edition. Thomson South-Western, 2006. {{ISBN|0-324-22114-2}}
* [[Milton Friedman|Friedman, Milton]], Nobel lecture: [https://www.nobelprize.org/nobel_prizes/economics/laureates/1976/friedman-lecture.pdf Inflation and unemployment] 1977
* [[Frederic Mishkin|Mishkin, Frederic S.]], ''The Economics of Money, Banking, and Financial Markets'', New York, Harper Collins, 1995.
* [[Federal Reserve Bank of Boston]], [http://www.bos.frb.org/economic/conf/conf53/index.htm "Understanding Inflation and the Implications for Monetary Policy: A Phillips Curve Retrospective"] {{Webarchive|url=https://web.archive.org/web/20130826003309/http://www.bos.frb.org/economic/conf/conf53/index.htm }}, Conference Series 53, June 9–11, 2008, Chatham, Massachusetts. (Also cf. [[Phillips curve]] article)

== External links ==
{{Library resources box
|by=no
|onlinebooks=no
|others=no
|about=yes
|label=Inflation}}
* [https://data.oecd.org/price/inflation-cpi.htm OECD Consumer Price Index]
* [http://www.bls.gov/cpi/ United States Bureau of Labor Statistics – Consumer Price Index]
* [http://dailytools.in/FinanceInvestment/InflationCalculator General purpose compounded inflation calculator]
* [http://www.aier.org/cost-living-calculator U.S. Cost of Living Calculator (1913–present)] ([[American Institute for Economic Research|AIER]])
* [http://www.bls.gov/data/inflation_calculator.htm U.S. Inflation Calculator (1913–present)] ([[US Bureau of Labor Statistics|US BLS]])
* [https://fraser.stlouisfed.org/theme/59 U.S. Inflation (historical documents)] ([[Federal Reserve Economic Data#Other Federal Reserve Bank of St. Louis data services|FRASER]])
* [https://web.archive.org/web/20080422012228/http://www.riksbank.com/templates/Page.aspx?id=27404 World Inflation (1290–2006)] ([[Consumer Price Index]]) ([[Swedish Riksbank]])
* [https://data.worldbank.org/indicator/FP.CPI.TOTL.ZG World Bank annual inflation rates for all countries]

{{Economics}}
{{United States – Commonwealth of Nations recessions}}

[[Category:Inflation| ]]
[[Category:Financial economics]]
[[Category:Macroeconomic aggregates]]
[[Category:Macroeconomic problems]]