<P> Inflation affects economies in various positive and negative ways . The negative effects of inflation include an increase in the opportunity cost of holding money , uncertainty over future inflation which may discourage investment and savings , and if inflation were rapid enough , shortages of goods as consumers begin hoarding out of concern that prices will increase in the future . Positive effects include reducing the real burden of public and private debt , keeping nominal interest rates above zero so that central banks can adjust interest rates to stabilize the economy , and reducing unemployment due to nominal wage rigidity . </P>
<P> Inflation affects economies in various positive and negative ways . The negative effects of inflation include an increase in the opportunity cost of holding money , uncertainty over future inflation which may discourage investment and savings , and if inflation were rapid enough , shortages of goods as consumers begin hoarding out of concern that prices will increase in the future . Positive effects include reducing the real burden of public and private debt , keeping nominal interest rates above zero so that central banks can adjust interest rates to stabilize the economy , and reducing unemployment due to nominal wage rigidity . </P>
when does inflation become a problem for average consumers
when does inflation become a problem for average consumers
increase in the opportunity cost of holding money , uncertainty over future inflation which may discourage investment and savings , and if inflation were rapid enough , shortages of goods as consumers begin hoarding out of concern that prices will increase in the future
increase in the opportunity cost of holding money , uncertainty over future inflation which may discourage investment and savings , and if inflation were rapid enough , shortages of goods as consumers begin hoarding out of concern that prices will increase in the future