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

My grandpa used to tell me that when he was a kid he could buy a candy bar for a nickel. In the U.S. just before World War II, a loaf of bread cost $0.15, a new car could be bought for less than $1,000, and the average house price was around $5,000. Today, bread, cars, houses and just about everything else cost a lot more. When the general price levels in a country rise, it is called inflation – and clearly, we've experienced a significant amount of inflation over the past century.

Contrary to popular belief, inflation is not a modern phenomenon. In fact, societies have been dealing with inflation for millennia. Records from ancient Rome indicate that the cost of a standard military uniform rose over time. Inflation struck often during Medieval Europe, and hit Spain particularly hard during the 1600’s. The 1900’s saw hyperinflation in Europe, Africa, and South America, where price levels skyrocketed, doubling sometimes over the course of weeks or even days.

Over the past decade or so, inflation has remained quite low, below 2% on an annual basis in much of the developed world. However, when inflation surged to double-digit levels in the mid- to late-1970’s, Americans declared it public enemy No.1. Public anxiety over inflation has since abated, but people still remain wary of rising prices, even at the minimal levels we've seen over the past few years. Although it's become common knowledge that prices go up over time, most people doesn't understand the forces behind inflation, who benefits and who loses from inflation, and what can be done to protect yourself from the economic harm it might cause you.

This tutorial will shed some light on these questions and consider other aspects of inflation.


Inflation: How Is It Measured?
Related Articles
  1. Insights

    A Primer On Inflation

    Inflation has a negative connotation, but is it all bad or does it offer some tangible benefits?
  2. Insights

    9 Common Effects of Inflation

    Is inflation ever good? If you like your job it is.
  3. Insights

    How Inflation Rates Impact Your Retirement Savings

    Understanding the risks and likely rate of inflation can help investors craft a strategically, well-diversified retirement portfolio.
  4. Insights

    Is U.S. Inflation on the Horizon?

    Inflation, or the general price level of all goods and services in an economy, has remained subdued in the years following the Great Recession. Given recent developments, is the U.S. on the verge ...
  5. Personal Finance

    Fight Back Against Inflation

    Inflation is often a consequence of economic recovery. Here's how you can protect your financial portfolio.
  6. Insights

    How Inflation Affects Your Net Worth

    When calculating your net worth, don't forget to take inflation into account.
  7. Insights

    Inflation for Dummies

    Inflation may seem like a straightforward concept, but it is more complex than it appears. Learn here about its varieties and causes.
Trading Center