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Expected inflation rate

Definition

The expected inflation rate refers to the anticipated increase in the general price level of goods and services over a specific period. It is based on predictions made by economists and can impact various economic decisions.

Related terms

Actual inflation rate: The actual inflation rate is the real increase in prices that occurs over a given period. It is determined by measuring changes in consumer price indexes or other indicators.

Deflation: Deflation refers to a sustained decrease in the general price level of goods and services. It is the opposite of inflation.

Hyperinflation: Hyperinflation is an extremely high and typically accelerating inflation. It occurs when there is an excessive increase in money supply, leading to rapid erosion of purchasing power.

"Expected inflation rate" appears in:

Study guides (1)

AP Macroeconomics - 4.5 The Money Market

Practice Questions (2)

When the inflation rate exceeds the expected inflation rate, what happens to the real interest rate?
When the inflation rate is lower than the expected inflation rate, what happens to the real interest rate?

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