In economics, the inflation rate is a measure of inflation, or the rate of increase of a price index such as the consumer price index. It is the percentage rate of change in price level over time, usually one year. The rate of decrease in the purchasing power of money is approximately equal.
The inflation rate is used to calculate the real interest rate, as well as real increases in wages. Official measurements of this rate are input variables to COLA adjustments and inflation derivatives prices.
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“Strange that the vanity which accompanies beauty—excusable, perhaps, when there is such great beauty, or at any rate understandable—should persist after the beauty was gone.”
—Mary A. [Elizabeth, Countess Von] Arnim (1866–1941)