Inflation Rate
Inflation rate is a measure of the rate at which the general level of prices for goods and services is rising, and, subsequently, purchasing power is falling. Inflation rate is calculated by taking the percentage change in a price index, such as the Consumer Price Index (CPI). The inflation rate is used to measure the change in the cost of living over time and is an important indicator of the health of an economy.
History of Inflation Rate
Inflation rate has been used as a measure of economic health since the early 20th century. The first official measure of inflation rate was the Retail Price Index (RPI), which was introduced in 1947. The RPI was replaced by the Consumer Price Index (CPI) in 1996. The CPI is the most widely used measure of inflation rate and is used by governments and central banks to set economic policy.
Inflation rate is closely monitored by central banks and governments, as it can have a significant impact on economic growth. If inflation rate is too high, it can lead to higher interest rates, which can slow economic growth. Conversely, if inflation rate is too low, it can lead to deflation, which can also have a negative impact on economic growth.
Table of Comparisons
| Year | Inflation Rate (%) |
|---|---|
| 2020 | 1.3 |
| 2019 | 2.3 |
| 2018 | 2.4 |
| 2017 | 2.7 |
| 2016 | 1.3 |
Summary
Inflation rate is an important measure of economic health and is closely monitored by central banks and governments. It is calculated by taking the percentage change in a price index, such as the Consumer Price Index (CPI). If inflation rate is too high, it can lead to higher interest rates, which can slow economic growth. Conversely, if inflation rate is too low, it can lead to deflation, which can also have a negative impact on economic growth. For more information about inflation rate, you can visit websites such as the U.S. Bureau of Labor Statistics, the Federal Reserve Bank of St. Louis, and the World Bank.
See Also
- Consumer Price Index (CPI)
- Gross Domestic Product (GDP)
- Interest Rates
- Deflation
- Monetary Policy
- Unemployment Rate
- Exchange Rates
- Gross National Product (GNP)
- Real Interest Rate
- Real Gross Domestic Product (GDP)
