What are the common effects of inflation?

Modified on Mon, 18 Jun 2018 at 12:50 PM

If you believe the headlines, inflation is back after a long post-crisis stint of disinflation and, in some instances, outright deflation. Since investors haven't seen significant price rises in years, it's worth brushing up on the most common effects of inflation.

1. Erodes Purchasing Power

2. Encourages Spending and Investing

3. Causes More Inflation

4. Raises the Cost of Borrowing

5. Lowers the Cost of Borrowing

6. Reduces Unemployment

7. Increases Growth

8. Reduces Employment and Growth

9. Weakens (or Strengthens) the Currency

Source : Investopedia

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