Why Is Inflation Picking Up So Quickly?

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Why Is Inflation Picking Up So Quickly?

The key is to understand what inflation is. The definition of inflation that economists use is «too much money chasing too few goods.» If you break this down, you will notice two parts. There is the quantity money part and the goods part. The word «goods» means anything that you purchase with money, which could be things, services, expertise etc. Notice that there is a relationship between the money and the goods. This relationship is governed by supply and demand, but an easy way to think of it is that there has to be a balance between the two things in order to have the value of goods remain stable.

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