Medical care inflation is likely to be easily overstated because that calculation ignores quality increases .
In economics, inflation is a common rise in the prices of goods and services in the economy. As general price levels rise, each currency unit buys fewer goods and services. As a result, inflation responds to a decline in the purchasing power of money. The opposite of inflation is deflation, which is a sustained decline in the general price level of goods and services. The usual measure of inflation is the inflation rate.
This is the annual rate of change of a typical price index. The Consumer Price Index (CPI) is often used for this purpose because prices do not all rise at the same rate. The Employment Cost Index (EPI) is also used for US wages.
Very high inflation and hyperinflation-which have a serious devastating impact on the real economy can be caused by the sustained overgrowth of the money supply.
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