Secular inflation is a prolonged period of gentle or mild price increases. Secular, or chronic, inflation is basically creeping

inflation In economics, inflation is an increase in the average price of goods and services in terms of money. This increase is measured using a price index, typically a consumer price index (CPI). When the general price level rises, each unit of curre ...

that continues to persist over a long period of time. Creeping inflation is the gradual, rather than drastic, increase in prices. Although most commonly used to describe a mild inflation rate, secular inflation can be used to describe most inflation rates that are spread over long periods of time. This type of inflation can be consistent (without many downward movements) or intermittent (occurring at regular intervals).

Causes

Friedrich-Karl Lage, the economist credited with coining the term ''secular inflation'', described three causes for secular inflation. These are: outside influences, the wear-and-tear on money-stabilizing institutions, and human conduct. Other factors contributing to secular inflation are production and distribution, as

costs of production Cost is the value of money that has been used up to produce something or deliver a service, and hence is not available for use anymore. In business, the cost may be one of acquisition, in which case the amount of money expended to acquire it is ...

and

investments Investment is traditionally defined as the "commitment of resources into something expected to gain value over time". If an investment involves money, then it can be defined as a "commitment of money to receive more money later". From a broade ...

that take a long time to mature prolong rising prices and inflation rates. A final cause of secular inflation is consumption behavior, especially when people live beyond their means as a result of the Duessenberry effect.

References

Inflation {{economics-stub

Causes

See also

References