Investors feel more comfortable with the stability of ultra-short term investments while ignoring the long-term effect of inflation.
They cannot know what the investment return of a pension will be, or the final income, or the effect of inflation.
The most familiar effect of inflation is a general rise in prices, as opposed to a rise of particular commodities prices because of factors in those markets.
The effect of inflation on households varies by circumstance.
Some central banks, slow to grasp the effect of these structural changes on inflation and monetary policy, have been running overly loose policies that have fuelled unsustainable booms in America and some other economies.
This has the perverse effect of giving higher real (inflation-adjusted) interest rates to slow-growing, low-inflation countries, and lower real rates to booming economies with rapid inflation precisely the opposite of what a sound monetary authority would prescribe.
The goal of these policies is to contain inflation, despite having the negative side-effect of quelling growth.
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The government is trying to anticipate this first by its warnings that money will only be released in return for results, and second by giving new instructions to the official pay-review bodies, which will have to consider the overall affordability of pay rises and their effect on inflation.
Perhaps deliberately, perhaps as a side effect of the high interest rates required to extinguish inflation.
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So if the pound starts to fall, there is a risk that it will eventually feed into higher inflation, perhaps offsetting the effect of slower growth.
If you scare the public sector into pay freezes with the implied job loss threats of austerity, you have in effect let inflation cut your overheads by a quarter.
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Or to put it another way, the Department made unrealistic assumptions about the growth of passenger numbers and inflation towards the back end of the franchise period - which had the effect of making First Group's bid seem significantly more attractive, because First Group was massively more optimistic about how passengers and revenues could grow after 2021 than was Virgin.
Nor is there much worry about a potential nasty side-effect of a booming current-account surplus: rising inflation.
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Metals are seen as a hedge against inflation a possible side effect of all the easy monetary policies as well as a comfort to those expecting a particularly dire outcome for the world.
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In 2008, for example, the European Central Bank raised interest rates just months before the financial crisis because of rising commodity prices and their likely effect on inflation, even though the European economy was already weakening sharply.
"We fear a negative effect especially on the economies of consumer countries in terms of inflation, " he added.
For example, inflation is classically thought of as a side-effect of strong economic growth.
Many expect that UK inflation will dip again in December, as the effect of lower petrol prices is seen.
But the immediate effect of the change in the law has been to stoke worries that inflation will take off, putting pressure on the peso (see chart).
In effect these types of measures represent on-off negative supply shocks on inflation, taking it lower, says Tony Volpon, managing director at Nomura Securities in New York.
The authors use three different macroeconomic models to simulate the effect of central banks' responding to asset-price movements as well as inflation.
Capital gains also aren't indexed for inflation, so a lower rate is intended to offset the effect of inflated gains.
America's Treasury says that because of the higher inflation rate in China, the yuan is in effect appreciating against the dollar by more than 10% a year.
Falling food prices have quickly had an effect on inflation in China, which fell to 4% in October from a peak of 8.7% in February.
Considering the holiday effect of the Chinese New Year in early February and the increase in fuel prices, the inflation number came in above market expectations.
Inflation was believed to be driven largely by non-monetary factors, and most people believed that if you tried to control inflation using monetary policy, the primary effect would be to throw a lot of people out of work.
The Fed talks about the stimulative effect of lower interest rates created by their purchases, but there is apparently no mention that higher inflation, when it occurs, would increase interest rates.
Members of the Bank of England's Monetary Policy Committee will have to decide whether the dominant effect of the energy price rise is to reduce demand from the economy, so that the long term prospects for inflation returning to target are improved, or to dangerously increase underlying inflationary pressures.
It will also have little effect on the velocity of money, which should actually increase even more as the increase in interest rates fuels even more inflation angst.
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