Chapter 4: Inflation and Deflation

In this section

• Measuring Inflation (CPI, PPI, GDP Deflator)
  Explore how inflation is measured using the CPI, PPI, and GDP Deflator, understand their methodologies, limitations, and how they are applied in real-world economic analysis.
• The Quantity Theory of Money
  Explore the core principles of the Quantity Theory of Money, its short-run vs. long-run implications, and how it shapes inflation and monetary policy decisions.
• Causes and Types of Inflation (Demand‐Pull vs. Cost‐Push)
  Comprehensive coverage of the main drivers of inflation—demand and cost factors—plus wage-price spirals, imported inflation, disinflation, reflation, and their implications for both macro policy and portfolio management contexts.
• Consequences of Inflation and Deflation
  Explore how inflation and deflation affect economies, market participants, and capital market expectations, with practical insights and real-world case studies.
• The Phillips Curve and Price Stability
  A comprehensive exploration of the Phillips Curve's short-run and long-run dynamics, the role of inflation expectations, and the significance of price stability in economic policy.
• Stagflation and Supply Shocks
  Explore the dynamics of stagflation and supply-side disruptions, their macroeconomic implications, and policy dilemmas faced by governments and central banks.
• Hyperinflation and Historical Perspectives
  Explore the causes, consequences, and prominent historical examples of hyperinflation, and learn practical strategies for preparing portfolios and national economies against severe currency debasement.
• Core vs. Headline Inflation Measures
  Discover the differences between core and headline inflation metrics, how each informs central bank policy, and their relevance for portfolio positioning in fluctuating markets.