Definition of Inflation uncertainty

Inflation uncertainty

The fact that future inflation rates are not known. It is a possible contributing factor to
the makeup of the term structure of interest rates.

Inflation

The rate at which the general level of prices for goods and services is rising.

Inflation risk

Also called purchasing-power risk, the risk that changes in the real return the investor will
realize after adjusting for inflation will be negative.

Inflation-escalator clause

A clause in a contract providing for increases or decreases in inflation based on
fluctuations in the cost of living, production costs, and so forth.

inflation

Rate at which prices as a whole are increasing.

Cost-Push Inflation

inflation whose initial cause is cost increases rather than excess demand. See also demand-pull inflation.

Demand-Pull Inflation

inflation whose initial cause is excess demand rather than cost increases. See also cost-push inflation.

Disinflation

A reduction in the rate of inflation.

Hyperinflation

Extremely high inflation.

Inflation

A sustained increase in the general price level. The inflation rate is the percentage rate of change in the price level.

Inflation Tax

The loss in purchasing power due to inflation eroding the real value of financial assets such as cash.

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