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Inflationary Psychology
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Definition of 'Inflationary Psychology'
The relationship between inflation and individuals' behavior.
Investopedia explains 'Inflationary Psychology'
For example, in times of higher-than-average inflation, consumers have a higher likelihood of borrowing to buy things because they are assuming goods will cost more tomorrow than they do today. This increased buying only exacerbates inflation.
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Related Definitions
Consumer Price Index - CPI
A measure that examines the weighted average of prices of a basket of consumer goods and services, such as transportation, food and medical care. The CPI is calculated by taking price ...
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Deflation
A general decline in prices, often caused by a reduction in the supply of money or credit. Deflation can be caused also by a decrease in government, personal or investment spending. The ...
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Disinflation
A slowing in the rate of price inflation. Disinflation is used to describe instances when the inflation rate has reduced marginally over the short term. Although it is used to describe ...
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Price Creep
The gradual and steady increase in the valuation or market price of an asset. Price creep refers to a situation in which either an individual or a group of individuals gradually lessen ...
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Hyperinflation
Extremely rapid or out of control inflation. There is no precise numerical definition to hyperinflation. Hyperinflation is a situation where the price increases are so out of control ...
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Inflation
The rate at which the general level of prices for goods and services is rising, and, subsequently, purchasing power is falling. Central banks attempt to stop severe inflation, along with ...
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Inflation-Indexed Security
A security that guarantees a return higher than the rate of inflation if it is held to maturity. Also known as a "real return"security, inflation-indexed securities link their capital ...
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Producer Price Index - PPI
A family of indexes that measures the average change in selling prices received by domestic producers of goods and services over time. PPIs measure price change from the perspective of ...
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Reflation
A fiscal or monetary policy, designed to expand a country's output and curb the effects of deflation. Reflation policies can include reducing taxes, changing the money supply and ...
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Retail Price Index - RPI
An index that gathers the prices of several retail goods in outlets across the United States in order to give an indication of the rate of inflation.
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Stagflation
A condition of slow economic growth and relatively high unemployment - a time of stagnation - accompanied by a rise in prices, or inflation.
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Stagnation
A period of little or no growth in the economy. Economic growth of less than 2-3% is considered stagnation. Sometimes used to describe low trading volume or inactive trading in securities.
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Treasury Inflation Protected Securities - TIPS
A treasury security that is indexed to inflation in order to protect investors from the negative effects of inflation. TIPS are considered an extremely low-risk investment since they are ...
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Nearby Definitions
Inflationary Gap
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Inflation-Linked Savings Bonds (I Bonds)
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Inflation-Protected Annuity - IPA
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Inflation-Protected Security - IPS
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Inflationary Psychology
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Inflationary Risk
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Inflection Point
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Inflexible Expense
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Infomercial
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Articles Of Interest
All About Inflation
What causes inflation? How does it affect your investments and standard of living? This tutorial has the answers.
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What You Should Know About Inflation
Find out how this figure relates to your investment portfolio.
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Introduction To Inflation-Protected Securities
Inflation is an enemy to investors - except to those who invest in IPS, which guarantee a real rate of return with no credit risk.
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The Consumer Price Index: A Friend To Investors
As a measure of inflation, this index can help you make key financial decisions.
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An Introduction To Hyperinflation
Hyperinflation isn't some historical curiosity. It is a very real risk that countries and governments still struggle with today.
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