Inflation

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Community · Velocity of money

Summary

In economics, inflation is an increase in the average price of goods and services in terms of money, though it originally referred to the increase of the money supply that can cause such a universal shift.

36 words

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the core economic phenomenon described
The Price Revolution is defined as a period of sustained, high-rate inflation that transformed the European economy in the 16th century.
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central economic problem addressed by monetarist policy
Monetarists famously argue that inflation is always and everywhere a monetary phenomenon caused by excessive growth in the money supply.
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phenomenon explained by the quantity theory
The quantity theory of money provides a primary explanation for inflation, suggesting that excessive growth in the money supply leads to a general increase in price levels.
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consequence of velocity changes
Increases in the velocity of money, if not matched by increases in output, can lead to inflationary pressure as more money chases the same amount of goods.
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Facts