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{{short description|Rise in price level in an economy over time}}
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[[File:US Inflation.png|thumb|upright=1.4|Price inflation (CPI year-on-year) in the United States from 1914 to 2018.]]
[[File:World Inflation Rate 2019.png|thumb|380px|Inflation in countries around the world in 2019.]]
In [[economics]], '''inflation''' (or less frequently, '''price inflation''') is a general rise in the [[price level]] in an economy over a period of time.<ref>{{harvnb|Wyplosz|Burda|1997}} (Glossary)</ref><ref>{{harvnb|Blanchard|2000}} (Glossary)</ref><ref>{{harvnb|Barro|1997}} (Glossary)</ref><ref>{{harvnb|Abel|Bernanke|1995}} (Glossary)</ref>
When the general price level rises, each unit of currency buys fewer goods and services; consequently, inflation reflects a reduction in the [[purchasing power]] per unit of money{{snd}}
Economists believe that very high rates of inflation and [[hyperinflation]] are harmful, and are caused by an excessive growth of the [[money supply]].<ref>Robert Barro and Vittorio Grilli (1994), ''European Macroeconomics'', Ch. 8, p. 139, Fig. 8.1. Macmillan, {{ISBN|0-333-57764-7}}.</ref> Views on which factors determine low to moderate rates of inflation are more varied. Low or moderate inflation may be attributed to fluctuations in [[real versus nominal value (economics)|real]] [[demand]] for goods and services, or changes in available supplies such as during [[scarcity|scarcities]].<ref>{{cite web|url=http://research.stlouisfed.org/fred2/series/MZMV|title=MZM velocity|access-date=September 13, 2014}}</ref> However, the consensus view is that a long sustained period of inflation is caused by money supply growing faster than the rate of economic growth.<ref name="Mankiw 2002 pp=81–107">{{Harvnb|Mankiw|2002|pp=81–107}}</ref><ref>{{Harvnb|Abel|Bernanke|2005|pp=266–269}}</ref>
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Conceptually, inflation refers to the general trend of prices, not changes in any specific price. For example, if people choose to buy more cucumbers than tomatoes, cucumbers consequently become more expensive and tomatoes 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|date=July 25, 2014|work=Vox|access-date=September 13, 2014}}</ref>
Other economic concepts related to inflation include: [[deflation]]{{snd}}
===Inflation expectations===
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