Inflation: Conclusion
AAA
  1. Inflation: Introduction
  2. Inflation: What Is Inflation?
  3. Inflation: How Is It Measured?
  4. Inflation: Inflation And Interest Rates
  5. Inflation: Inflation And Investments
  6. Inflation: Conclusion
Inflation: Conclusion

Inflation: Conclusion

After reading this tutorial, you should have some insight into inflation and its effects. For starters, you now know that inflation isn't intrinsically good or bad. Like so many things in life, the impact of inflation depends on your personal situation.

Some points to remember:

  • Inflation is a sustained increase in the general level of prices for goods and services.
  • When inflation goes up, there is a decline in the purchasing power of money.
  • Variations on inflation include deflation, hyperinflation and stagflation.
  • Two theories as to the cause of inflation are demand-pull inflation and cost-push inflation.
  • When there is unanticipated inflation, creditors lose, people on a fixed-income lose, "menu costs" go up, uncertainty reduces spending and exporters aren't as competitive.
  • Lack of inflation (or deflation) is not necessarily a good thing.
  • Inflation is measured with a price index.
  • The two main groups of price indexes that measure inflation are the Consumer Price Index and the Producer Price Indexes.
  • Interest rates are decided in the U.S. by the Federal Reserve. Inflation plays a large role in the Fed's decisions regarding interest rates.
  • In the long term, stocks are good protection against inflation.
  • Inflation is a serious problem for fixed income investors. It's important to understand the difference between nominal interest rates and real interest rates.
  • Inflation-indexed securities offer protection against inflation but offer low returns.

  1. Inflation: Introduction
  2. Inflation: What Is Inflation?
  3. Inflation: How Is It Measured?
  4. Inflation: Inflation And Interest Rates
  5. Inflation: Inflation And Investments
  6. Inflation: Conclusion
Inflation: Conclusion
RELATED TERMS
  1. LIBOR

    LIBOR or ICE LIBOR (previously BBA LIBOR) is a benchmark rate ...
  2. Global Recession

    An extended period of economic decline around the world. The ...
  3. Economic Exposure

    A type of foreign exchange exposure caused by the effect of unexpected ...
  4. Heckscher-Ohlin Model

    An economic theory that states that countries export what they ...
  5. North American Free Trade Agreement - NAFTA

    A regulation implemented on Jan. 1, 1994, that decreased and ...
  6. Current Account Surplus

    A positive difference between a nation’s savings and investment. ...
  1. Does it make sense to convert a Traditional IRA to a Roth when the market’s down?

    If your modified adjusted gross income (MAGI) is $100,000 or less and you are not married filing separately, you may initiate ...
  2. Can I roll a Traditional IRA into a 529 college account for my grandchild?

    A 529 plan, also known as a "qualified tuition program", is an investment vehicle that allows individuals to save for education ...
  3. Can I still set up an SEP if one of my employees refuses to participate?

    You can establish the SEP IRA, even if the employee refuses to participant. However, you would need to establish an IRA for ...
  4. I want to close my IRA account. What percentage will I lose to tax?

    You can move the amount by means of a trustee-to-trustee transfer to another IRA, or roll over the amount to your 401(k). ...
comments powered by Disqus
Related Tutorials
  1. Economics Basics
    Economics

    Economics Basics

  2. The Federal Reserve
    Economics

    The Federal Reserve

  3. Macroeconomics
    Economics

    Macroeconomics

  4. Consolidating Your Retirement Money
    Retirement

    Consolidating Your Retirement Money

  5. Analyzing The Best Retirement Plans And Investment Options
    Retirement

    Analyzing The Best Retirement Plans And Investment Options

Trading Center