So you've learn a lot about the effects of inflation, but why does it actually happen in the first place?

Let’s explore 5 key causes of inflation 👉

1️⃣ Demand-pull effect: when people have more money to spend & want to buy more things, it can create increased demand 🪢

Businesses raise prices to take advantage of the increased demand, which causes more businesses to raise prices, and so forth -- triggering a domino effect of rising costs, and rising inflation 📈

2️⃣ Cost-push effect: rising energy costs, increased raw material prices or higher wages can also result in increased prices for products and services 🥊

3️⃣ External factors: changes in international markets, exchange rates, or global commodity prices can also affect inflation 🌍

4️⃣ Government actions: policies, printing money or fiscal stimulus -- like the COVID-19 stimulus checks -- can increase inflation since people have more money to spend 🌊

5️⃣ Decrease in the production of goods and services ⚙️

When production decreases due to protests, supply chain issues, or wars, there's less stuff available to buy and prices go up.

So, inflation has many complex causes that often relate to each other 🤔

It’s important to keep all of them in mind and monitor the economy so you can make better decisions with your money 🚀