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Inflation

Glossary Term

Inflation is the general increase in prices over time, which reduces the purchasing power of money. When inflation rises, the same amount of money buys fewer goods and services than before. Economists debate the causes of inflation, but many agree that rapid inflation can make budgeting, saving, and long-term planning more difficult.

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Milton Friedman

The Case for Free Markets

Twentieth-century American economist and public explainer who turned free-market ideas into plain language and tied economic freedom to political freedom.

Thinker

Price Signal

A price acts as a message about how scarce or valuable something is. When prices go up, it tells producers to make more and consumers to use less. When prices fall, the opposite happens — without anyone giving the order.