Open AccessA review of inflation and economic growth
Author(s) -
Amir Fatoureh Bonab
Publication year - 2019
Publication title -
journal of management and accounting studies
Language(s) - English
Resource type - Journals
ISSN - 2693-8448
DOI - 10.24200/jmas.vol5iss02pp1-4
Subject(s) - economics , inflation (cosmology) , producer price index , purchasing power , monetary economics , deflation , price level , real interest rate , price index , consumer price index (south africa) , wholesale price index , goods and services , investment (military) , relative price , unit (ring theory) , currency , macroeconomics , interest rate , monetary policy , economy , mid price , physics , mathematics education , mathematics , politics , theoretical physics , political science , law
In economics, inflation is a sustained increase in the general price level of goods and services in an economy over a period of time. When the 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 – a loss of real value in the medium of exchange and unit of account within the economy. Methodology: A chief measure of price inflation is the inflation rate, the annualized percentage change in a general price index, usually the consumer price index, over time. The opposite of inflation is deflation. Results: If economic growth matches the growth of the money supply, inflation should not occur when all else is equal. A large variety of factors can affect the rate of both.Conclusion: For example, investment in market production, infrastructure, education, and preventative health care can all grow an economy in greater amounts than the investment spending.