Inflation vs. Deflation
Inflation:
- Increase in the general prices of goods and services.
- Common in growing economies.
Deflation:
- Decrease in the general prices of goods and services.
- Often linked to recessions or financial crises.
Inflation erodes purchasing power, while deflation increases it — but both can destabilize the economy if left unchecked.
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Economics and politics student from Germany. Interested in a broad field of topics and trying to easily break down topics from his studies to everyone.
In this Mini-Series, we will talk about the key concepts of macroeconomics. I will shortly explain each concept in a respective post. This is part 3 of 5, covering Inflation.
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Similar ideas to Inflation vs. Deflation
Cost-Push Inflation
Cost-push inflation is the decrease in the aggregate supple of goods and services stemming from an increase in the cost of production.
An increase in the costs of raw materials or labor can contribute to cost-pull inflation.
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