WordGarden.ioinflationary
C2Pronunciation
UK
- /ɪnflˈeɪʃənəri/
US
- /ˌɪnˈfleɪʃəˌnɛri/
Meanings
Adjective
relating to or tending to cause rising prices
tending to expand, increase, or overstate something
relating to cosmic inflation in the early universe
Beyond the definition
Imagine your favorite candy bar costs $1 today. If many things, from that candy bar to gas for the car, start getting more expensive over time, we call that inflationary. It is not just one price going up for a short time. It means something is helping create a wider rise in prices across the economy.
You may hear the phrase "inflationary pressures" on the news. That means there are forces pushing prices higher. Governments and central banks, such as the Federal Reserve, watch these trends closely because high inflation makes your money buy less. In an inflationary period, saving can feel harder because prices keep moving up.
The term "inflationary" describes something that contributes to or causes inflation, which is a sustained rise in the general price level of goods and services in an economy. It is more than a temporary jump in one price. Instead, it points to a broader pattern in which prices are being pushed upward.
Something can be inflationary in several ways. Higher government spending, especially when production does not also rise, can be inflationary. Policies that increase the money supply without a matching increase in goods and services can also push prices up. Supply chain problems, like those seen during the COVID-19 pandemic, may create an inflationary environment by making products harder to get.
You will often hear "inflationary pressures" used for factors that are likely to raise prices, such as strong demand, rising wages, or higher energy costs. Economists and policymakers watch signs of inflation, such as the Consumer Price Index, to understand what is happening in the economy and to decide whether policy should change.
For example, a large stimulus package meant to boost economic activity could be described as "potentially inflationary" if it increases demand faster than supply can keep up. You might also read that rising oil prices are adding to inflationary concerns because transport and production become more expensive. Understanding what is inflationary helps us see why everyday costs, from groceries to housing, may keep rising.
Examples
- 1
Wage costs
Economists warned that the large pay increase could be inflationary if businesses pass the extra cost on to customers.
- 2
Tax policy
The central bank said the tax cuts might add to inflationary pressures later in the year.
- Phraseadd to inflationary pressures
make future price rises more likely
- 3
Energy prices
Higher oil prices often have an inflationary effect across the whole economy.
- Phraseinflationary effect
an effect that pushes prices up
- 4
Price expectations
Once people expect prices to keep rising, an inflationary spiral can be difficult to stop.
- Phraseinflationary spiral
a cycle in which rising prices lead to more rises
More examplesFewer examples
- 5
Investing
In an inflationary environment, many investors prefer assets that can hold their value better than cash.
- Phraseinflationary environment
a period when prices are generally rising
See also
Similar
- inflation-causing
- price-raising
Shades of meaning
- reflationary
- expansionary
Contrast
- deflationary
- disinflationary
Do not confuse
Used with (collocations)
- inflationary pressures
- inflationary expectations
- inflationary spiral
- inflationary policy
Word family
Explore
- monetary policy
- cost-push inflation
Forms and spellings
1 form open this card.
Main spelling
- inflationaryadjective