Economy · Core
Inflation
Inflation is a sustained rise in the general price level — a decline in purchasing power, not a one-off relative-price shock.
Definition
Measured as the rate of change of a price index (CPI, PCE, deflator). Demand-pull, cost-push, and monetary stories compete. A relative-price spike (oil) is not inflation until it is in the general level and the expectations.
Why it matters
Real rates, contracts, and politics are inflation objects. Too little (deflation) and too much both break debt math.
Case
1970s inflation was a regime; 2021–23 was a burst with a debate about persistence. The same word, different persistence, different policy.
How to read it
Which index, which horizon, and whether expectations are anchored. Level of prices is not the rate of inflation.
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