inflation

In economics, a rise in the general level of prices. The many causes include cost-push inflation, which results from rising production costs. Demand-pull inflation occurs when overall demand for goods exceeds the supply. Suppressed inflation occurs in controlled economies and is reflected in rationing, shortages, and black-market prices. Hyperinflation is inflation of more than 50% in one month. Deflation, a fall in the general level of prices, is the reverse of inflation.

In 1997 and 1998, the USA recorded its lowest two-year inflation rise in 34 years. The two years' increases were 1.7% followed by 0.1%. The increases were small because of a large drop in petrol and other petroleum prices. Energy costs in 1998 fell by 8.8%, the largest decline since 1986.

inflation

In cosmology, a phase of extremely fast expansion thought to have occurred within 10−32 seconds of the Big Bang and in which almost all the matter and energy in the universe was created. The inflationary model based on this concept accounts for the density of the universe being very close to the critical density, the smoothness of the cosmic background radiation, and the homogeneous distribution of matter in the universe. Inflation was proposed by US astrophysicist Alan Guth in the early 1980s.