Unanticipated Inflation

Definition

Unanticipated inflation refers to a sudden and unexpected increase in the general price level of goods and services in an economy. It occurs when the actual rate of inflation differs from what individuals and businesses had anticipated.

Related terms

Inflation: Inflation is a sustained increase in the general price level of goods and services over time. It erodes the purchasing power of money.

Menu Costs: Menu costs refer to the expenses incurred by firms when they need to change their prices due to inflation. These costs include printing new menus, updating price tags, or modifying online listings.

Deflation: Deflation is the opposite of inflation; it refers to a sustained decrease in the general price level of goods and services. During deflationary periods, prices tend to fall, which can have various economic implications.