Register now or log in to join your professional community.
Creeping Inflation
That's because this mild inflation sets expectations that prices will continue to rise. As a result, it sparks increased demand as consumers decide to buy now before prices rise in the future. By increasing demand, mild inflation drives economic expansion.
Walking Inflation
This type of strong, or pernicious, inflation is between 3-10% a year. It is harmful to the economy because it heats up economic growth too fast. People start to buy more than they need, just to avoid tomorrow's much higher prices.
Galloping Inflation
When inflation rises to ten percent or greater, it wreaks absolute havoc on the economy. Money loses value so fast that business and employee income can't keep up with costs and prices. Foreign investors avoid the country, depriving it of needed capital. The economy becomes unstable, and government leaders lose credibility
Hyperinflation
Hyperinflation is when the prices skyrocket more than 50% a month. It is fortunately very rare.
Stagflation
Stagflation is just like its name says: when economic growth is stagnant, but there still is price inflation. This seems contradictory, if not impossible.
Deflation
Deflation is the opposite of inflation - it's when prices fall. It's caused when an asset bubble bursts.
