Principles of Macroeconomics / Unit 10 MAC 0912 short lesson, about 20 seconds
Inflation in the Long Run
Captions available
The idea
Over long periods inflation is set by two rates: how fast money grows and how fast the economy grows. Money growth above real growth produces inflation; below it, deflation.
In practice
A study of 116 countries from 1960 to 2007 found the relationship strongest where inflation averaged above ten percent.
Where people slip
This is a result. The equation it comes from is unit twelve's.
Your place on the trail
Every lesson rests on earlier ones and opens later ones. Tap any to jump.
Unlocks
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