What Is Inflation And How To Stop It

An explanation and some ideas

Photo by regularguy.eth on Unsplash

Unless you’ve been living under a rock, you’ve probably felt the effects of inflation recently. If you’ve complained to your partner about the price of meat or turned down the thermostat because it’s more expensive to heat your home, you’re dealing with inflation.

What is inflation?

The Oxford dictionary states that, in economic terms, inflation is “a general increase in prices and fall in the purchasing value of money.”

What causes inflation?

According to the St. Louis Fed, inflation is caused when the money supply in an economy grows at a faster rate than the economy can produce goods and services. In other words, more dollars chasing the same or fewer products.

Is inflation a bad thing?

Some economists think a little bit of inflation is a good thing.

However, inflation leads to:

• Loss of purchasing power for consumers. This may not hurt workers because they may get raises commensurate with inflation, but it can be devastating to retired people.
• Less money is available for saving and investing. At the individual level, this can lead to insecurity. At the…