In economic terms, inflation is defined as a rise in the general level of prices of goods and services in an economy over a period of time. When prices rise, each unit of currency buys fewer goods and services, eroding real consumer purchasing power. Although deflation also is a risk to the economy, moderate inflation is much more prevalent over the course of modern history.
In the long run, the most significant factor influencing inflation is the growth rate of the money supply. Inflation occurs when the nominal supply of dollars grows faster than the real demand to hold dollars. However, in the short and medium term, inflation may be largely affected by supply and demand pressures in the economy, and influenced by the relative elasticity of wages, prices, and level of interest rates.
In the U.S., inflation is estimated by calculating the rate of change of the Consumer Price Index (CPI). The CPI measures prices of a selection of goods and services purchased by a typical consumer. The magnitude of inflation — the inflation rate — is usually reported as the annualized percentage growth of the CPI Index.
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About The Sundance Company
Established in 1976, The Sundance Company has the experience to help you with your commercial real estate needs in Boise, Meridian, Nampa, and the greater Treasure Valley. If your requirements include property management, leasing, real estate development, project planning, construction or space planning then look to us. The Sundance Company has more than 1.5 million square feet of office and industrial space available in prime Boise and Meridian locations. More information is available at www.sundanceco.com or 208.322.7300.
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