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Inflation
Inflation refers to a sustained rise in the overall level of prices in an economy.
The inflation rate is the percentage change in a price index—that is, the speed of overall price level movements.
The inflation rate is pro-cyclical but with a lag of a year or more.
Monetary policy determines interest rates and the available quantities of money and loans in an economy.
A high inflation rate combined with fast economic growth and low unemployment usually indicates the economy is overheating.
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If a high inflation rate is combined with a high level of unemployment and a slowdown of the economy—an economic state known as stagflation—the economy will typically be left to correct itself because no short-term economic policy is thought to be effective.
187The Costs of Inflation:inflation is the level of inflation that economic agents:expect in the future.;Unexpected;reduce the information content of market prices.
135Inflation:is thought to be effective.
347Inflation Targeting:Central:with targeting inflation has a degree of independence from its government.;Credibility:doubt.;Transparency:Inflation Reports consider and outline their;

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