Inflationary Economics

Inflationary economics studies how overall prices for goods and services increase over time, which reduces the purchasing power of money. When there is too much money circulating—due to factors like government spending, low interest rates, or increased demand—prices tend to rise. Moderate inflation can signal a growing economy, but excessive inflation erodes savings, raises living costs, and creates economic uncertainty. Policymakers use tools such as interest rate adjustments and monetary policy to control inflation levels, aiming to maintain a balance that encourages growth without destabilizing the economy.