Addressing Inflation and Inflationary Trends in Selected Economies

A set of vocabulary flashcards covering key terms and concepts related to inflation and its economic implications.

Inflation

The rate of increase in the prices of goods and services over time.

Inflation Targeting

A monetary policy strategy used by central banks to maintain inflation at a specified target rate, often around 2%.

Monetary Policy

Actions by central banks to control the money supply and interest rates to influence economic activity.

Quantitative Tightening (QT)

A monetary policy tool used to reduce the size of a central bank's balance sheet, thereby absorbing excess liquidity from the financial system.

Forward Guidance

Communication from central banks about future monetary policy intentions to shape expectations in financial markets.

Cost-Push Inflation

Inflation that occurs when the costs of production increase, leading to higher prices for goods and services.

Demand-Pull Inflation

Inflation caused by an increase in demand for goods and services, leading to higher prices.

Supply-Side Policies

Strategies aimed at increasing production by improving productivity and removing regulatory bottlenecks.

Exchange Rate Policies

Monetary strategies that involve managing the value of a country's currency to influence inflation.

Interest Rate Policy

A central bank's approach to setting the policy interest rate to manage inflation and economic growth.