Inflation: A Survey

Inflation is a process of continuously rising prices, or equivalently, of a continuously falling value of money. Its importance stems from the pervasive role played by money in a modern economy. A continuously falling value of pins, or of refrigerators, or of potatoes would not be regarded as a major social problem, important though it might be for the people directly engaged in the production and sale of those goods. The case of money is different precisely because the role that it plays in co-ordinating economic activity ensures that changes in its value over time impinge upon the well-being of everyone.