Inflation
in-FLAY-shun
/ɪnˈfleɪʃən/
A general increase in prices and fall in the purchasing value of money.
Inflation erodes the purchasing power of money over time. Moderate inflation is often seen as healthy for an economy, but high or hyperinflation can be very damaging.
The story behind the word. The word 'inflation' comes from the Latin 'inflatio,' meaning 'a blowing into, a swelling.' It combines 'in-' (into) and 'flare' (to blow). While it initially referred to physical swelling, its economic sense, describing the 'blowing up' or 'swelling' of prices and the money supply, emerged in the mid-19th century, particularly in discussions about paper currency.
Word relationships
- price hike: A specific, often sudden, increase in a price, not necessarily general.
- cost of living increase: Refers to the practical effect of inflation on household expenses.
- deflation: A general decrease in prices and increase in the purchasing value of money.
Word family
- inflate (verb): to cause to expand with air or gas; to cause prices to rise
- inflationary (adjective): relating to or causing inflation
Collocations
- high inflation
- low inflation
- rising inflation
- control inflation
- combat inflation
- inflation rate
Example sentences
- "Rising energy costs contributed significantly to the recent surge in inflation, making everyday goods more expensive." Discussing economic challenges.
- "The central bank's primary goal is to maintain price stability and keep inflation within a target range." A central bank statement.
Memory hook
Think of prices 'inflating' like a balloon getting bigger and bigger. Prices Swell Up
When not to use
Do not use 'inflation' to describe a single price increase for a specific product; it refers to a general, sustained rise across the economy.
Fun facts
- The opposite of inflation is deflation, but a period of slowing inflation is called 'disinflation.'
- Zimbabwe experienced hyperinflation in 2008, with monthly inflation rates reaching billions of percent.
Related words
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