Price-Index Inflation Rate Value

A Price-Index Inflation Rate Value is a price index change rate value (for a price index) that is an increased change rate value measuring the percentage increase in price levels over a specified time period.

• AKA: Inflation Value, Price Growth Rate Figure.
• Context:
  • It can typically quantify price level increase over a specific time period.
  • It can typically measure purchasing power erosion within an economy.
  • It can typically inform monetary policy decisions by central banks.
  • It can typically indicate economic conditions related to money supply and economic demand.
  • It can typically provide benchmark values for inflation-indexed contracts.
  • ...
  • It can often vary across different economic sectors and geographic regions.
  • It can often correlate with money supply growth during economic expansion.
  • It can often impact real interest rate values when combined with nominal interest rate.
  • It can often influence wage negotiations and pension adjustments.
  • ...
  • It can range from being a Low Price-Index Inflation Rate Value to being a High Price-Index Inflation Rate Value, depending on its economic condition and monetary policy.
  • It can range from being a Stable Price-Index Inflation Rate Value to being a Volatile Price-Index Inflation Rate Value, depending on its measurement period and underlying economic factors.
  • It can range from being a Headline Price-Index Inflation Rate Value to being a Core Price-Index Inflation Rate Value, depending on its included price components.
  • ...
  • It can be expressed as an annualized percentage for price-index inflation rate comparison across time periods.
  • It can be calculated using consumer price index for price-index inflation rate measurement affecting household purchases.
  • It can be calculated using producer price index for price-index inflation rate tracking at wholesale level.
  • It can be calculated using GDP deflator for price-index inflation rate analysis across the entire economy.
  • It can serve as a key performance indicator for central bank policy effectiveness.
  • It can indicate economic stability or economic distress depending on its magnitude and persistence.
  • ...
• Examples:
  • Price-Index Inflation Rate Value by index type, such as:
    • Consumer Price Index Inflation Rate Values, such as:
      • CPI Inflation Rate Value measuring consumer price change across household expenses.
      • Core CPI Inflation Rate Value excluding volatile price category items like food and energy.
    • Producer Price Index Inflation Rate Values, such as:
      • PPI Inflation Rate Value tracking wholesale price change for businesses.
      • Industrial PPI Inflation Rate Value focusing on manufacturing sector price changes.
    • GDP Deflator Inflation Rate Values, such as:
      • Domestic Output Price Inflation Rate Value measuring price changes across all domestically produced goods.
      • Investment Good Price Inflation Rate Value tracking capital equipment price changes.
  • Price-Index Inflation Rate Value by country, such as:
    • National Price-Index Inflation Rate Values, such as:
      • U.S. Inflation Rate tracking price level changes in the American economy.
      • Eurozone Inflation Rate Value measuring price changes across European monetary union.
    • Regional Price-Index Inflation Rate Values, such as:
      • Emerging Market Inflation Rate Values during economic development phases.
      • Advanced Economy Inflation Rate Values during monetary policy normalization.
  • Price-Index Inflation Rate Value by time specificity, such as:
    • Point-in-Time Price-Index Inflation Rate Values, such as:
      • U.S. Dec-2013 CPI Inflation Rate representing price change at a specific time point.
      • Germany Q2-2022 Inflation Rate Value during the post-pandemic period.
    • Period-Average Price-Index Inflation Rate Values, such as:
      • Annual Average Inflation Rate Value for yearly price trend comparison.
      • Five-Year Average Inflation Rate Value for medium-term price stability assessment.
  • Price-Index Inflation Rate Value by magnitude, such as:
    • Core Inflation Rate Values, such as:
      • Core Inflation Rate Value for underlying inflation trend measurement.
      • Low Core Inflation Rate Value during economic recession periods.
      • High Core Inflation Rate Value during demand-pull inflation episodes.
    • Extreme Price-Index Inflation Rate Values, such as:
      • Hyperinflation Rate Values exceeding 50 percent monthly rate.
      • Stagflation Rate Values combining high inflation with low growth.
  • ...
• Counter-Examples:
  • Deflation Rate, which represents negative price index change rates indicating falling price levels.
  • Disinflation Rates, which measure the slowing pace of price-index inflation rather than price decreases.
  • Wage Growth Rate Values, which track income changes rather than price changes.
  • Economic Growth Rate Values, which measure output expansion rather than price increases.
  • Interest Rate Values, which represent the cost of borrowing rather than general price changes.
  • Germany Dec-2013 HICP YoY 2010=100 http://www.bloomberg.com/quote/GRCP2HYY:IND
• See: Inflationary Period, Price Level, Real Interest Rate, Money with Zero Maturity, Central Bank Target, Inflation Expectation.

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References

2014

• (Wikipedia, 2014) ⇒ http://en.wikipedia.org/wiki/Inflation Retrieved:2014-7-2.
  • In economics, inflation is a sustained increase in the general price level of goods and services in an economy over a period of time.

    It can be defined as too much money chasing too few goods. When the general price level rises, each unit of currency buys fewer goods and services. Consequently, inflation reflects a reduction in the purchasing power per unit of money – a loss of real value in the medium of exchange and unit of account within the economy. A chief measure of price inflation is the inflation rate, the annualized percentage change in a general price index (normally the consumer price index) over time. Inflation's effects on an economy are various and can be simultaneously positive and negative. Negative effects of inflation include an increase in the opportunity cost of holding money, uncertainty over future inflation which may discourage investment and savings, and if inflation were rapid enough, shortages of goods as consumers begin hoarding out of concern that prices will increase in the future. Positive effects include ensuring that central banks can adjust real interest rates (to mitigate recessions), and encouraging investment in non-monetary capital projects. Economists generally believe that high rates of inflation and hyperinflation are caused by an excessive growth of the money supply. However, money supply growth does not necessarily cause inflation. Some economists maintain that under the conditions of a liquidity trap, large monetary injections are like "pushing on a string". Views on which factors determine low to moderate rates of inflation are more varied. Low or moderate inflation may be attributed to fluctuations in real demand for goods and services, or changes in available supplies such as during scarcities, as well as to changes in the velocity of money supply measures; in particular the MZM ("Money Zero Maturity") supply velocity. However, the consensus view is that a long sustained period of inflation is caused by money supply growing faster than the rate of economic growth. Today, most economists favor a low and steady rate of inflation. Low (as opposed to zero or negative) inflation reduces the severity of economic recessions by enabling the labor market to adjust more quickly in a downturn, and reduces the risk that a liquidity trap prevents monetary policy from stabilizing the economy. The task of keeping the rate of inflation low and stable is usually given to monetary authorities. Generally, these monetary authorities are the central banks that control monetary policy through the setting of interest rates, through open market operations, and through the setting of banking reserve requirements.

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