ECONOMICS GLOSSARY
Inflation
Inflation
A sustained increase in the general price level over time.
What does Inflation mean?
A sustained increase in the general price level over time. Professionals may calculate, document or apply this concept differently depending on the transaction, accounting method, lender policy and governing documents. Borrowers should confirm the precise definition used in any term sheet or agreement.
Inflation in context
Higher construction and labor costs can reflect inflationary pressure.
Why it matters in financing
Inflation can influence how a lender, investor or advisor evaluates risk, pricing, structure, repayment capacity or transaction economics. It should be considered together with the complete financial picture rather than used alone.
Related economics terms
Educational information only. This definition is general, may not match a particular lender or contract, and is not financial, accounting, tax or legal advice.