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Inflation Explained: Your Guide to Inflation Basics
The Cleveland Fed’s Center for Inflation Research provides definitions and explanations of inflation essentials for you to explore.
What is inflation?
Understand what inflation is and isn’t. Learn about common measures of inflation, the impact of inflation on the economy, and the tools the Federal Reserve uses to influence inflation.
- Is every price increase inflation?
- What’s the difference between a price increase and inflation?
- How can we tell if inflation is occurring?
- Inflation calculator
How is inflation measured?
Understand the structure and purpose of various price indexes and measures of inflation.
- Why are there so many price indexes and measures of inflation?
- What is "underlying" inflation?
- How is underlying inflation measured?
- What is the connection between the Phillips curve and inflation?
- What are hyperinflation, deflation, disinflation, and stagflation?
Why should you care about inflation?
Learn about possible consequences of inflation, whether expected or unexpected, on economic decisions and transactions.
- What are the effects of inflation?
- What problems does expected inflation cause?
- What problems does unexpected inflation cause?
Why does the Fed care about inflation?
We explain the relationships among stable prices, maximum employment, and moderate long-term interest rates and the Fed’s role in achieving these goals.
- The Federal Reserve cares about inflation, it’s a part of our mission
- How does the Fed influence inflation?
- What does the Federal Reserve have to do with inflation?
- What is the Federal Reserve's "dual mandate"?
- Does the Federal Reserve have a specific objective for inflation?
- Why doesn't the Federal Reserve set an inflation objective of 0 percent?
- Why are measures of underlying inflation useful?
Inflation resources
Explore articles, videos, and Research [in] Brief and other infographics to learn about inflation and how the Federal Reserve pursues its goals of price stability and maximum employment.
Featured
What’s the difference between price level and inflation?
Research Analyst Caroline Stafford explains the difference between price level and inflation, and why the Federal Reserve pays attention to them.
Key takeaways
- Price level refers to the overall or average cost of goods and services in the economy at a particular period of time, also known as the general cost of living.
- Inflation measures the rate of growth of price level over a particular span of time and is closely observed by the Federal Reserve as part of its price stability mandate.
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The Center for Inflation Research helps policymakers, researchers, industry professionals, and the informed public better understand inflation. The Center, unique across the Federal Reserve System, is led by a team of Cleveland Fed economists, with additional support from other Bank researchers and analysts. The Center was formally established in 2018 as a forum for nationally and internationally recognized economists specializing in inflation-related research to gather both in theoretical and practical discussion and in information sharing and engagement with the public.