Inflation
Inflation is the rate at which prices across the economy rise over time, so each dollar buys less. The US Federal Reserve targets 2% a year.
It is caused by demand outpacing supply, rising costs, or money growing faster than output. Moderate inflation is normal; high inflation erodes savings and makes planning hard.
Holding cash loses value to inflation, which is a main reason people invest.
In Journey Shares
Once a day, uninvested cash in the game loses value at the real US inflation rate (CPI). Invested money isn't affected. →
Related terms
- CPI (consumer price index): The consumer price index tracks the price of a fixed basket of goods and services that households buy.
- Deflation: Deflation is a sustained fall in the general price level.
- Stagflation: Stagflation is high inflation combined with slow growth and high unemployment.
- Monetary policy: Monetary policy is how a central bank manages interest rates and the money supply to keep inflation low and employment high.
Guides
Practise with $10,000 in play money
Free. No real money involved.
For learning only. This isn't financial advice.