when inflation occurs money loses its purchasing power this can occur across any sector or throughout an entire economy when inflation takes hold the expectation of inflation itself can further sustain the devaluation of money workers may demand higher wages and businesses may charge higher prices in anticipation of sustained inflation this in turn reinforces the factors that push prices up 
inflation can be classified into three types demand pull inflation cost push inflation and built in inflation melissa ling copyright investopedia 2019types of inflationdemand pull inflation occurs when an increase in the supply of money and credit stimulates the overall demand for goods and services to increase more rapidly than the economy s production capacity this increases demand and leads to price rises 