inflatsiyasi

Inflation is a sustained rise in the general price level of goods and services in an economy over time, which reduces the purchasing power of money. It is typically measured as an inflation rate published by statistical agencies, using price indices such as the consumer price index (CPI) or the GDP deflator. Core inflation, which excludes volatile items like food and energy, is often tracked to assess underlying price trends.

Economists identify several main causes. Demand-pull inflation occurs when aggregate demand exceeds an economy’s productive capacity. Cost-push inflation arises from higher production costs, including wages or raw materials. Built-in inflation reflects adaptive expectations and wage-price dynamics, where rising wages lead to higher prices and vice versa. Monetary factors, such as an expansion of the money supply or very low interest rates, can contribute to inflation, as can supply shocks like a sudden increase in commodity prices.

The effects of inflation depend on its magnitude and stability. Moderate, predictable inflation is common in growing economies, but high or volatile inflation erodes purchasing power, distorts price signals, and creates uncertainty. It can redistribute income between borrowers and savers and affect savers, pensioners, and those on fixed incomes more severely. Policymakers aim to maintain low, stable inflation to support sustainable growth and employment.

Policy responses typically involve monetary tools, including adjusting interest rates and managing credit conditions, sometimes complemented by fiscal measures and structural reforms. Central banks seek credibility through transparent targets and communication to anchor inflation expectations.