Most contracts, wage levels, and interest rates are either indexed to inflation, or involve using the currency of another country to sidestep the problem of inflation in some converging economies. Following these policies caused
the net flow of foreign investment in and out of the economy reached zero
solid levels of economic growth for sustained periods of time with 10-30% inflation
a moderate but substantial current account trade imbalance to control inflation
indexed inflation policy trade-offs that led to substantial restrictions on trade

The general increase in the price of goods and services across an economy is referred to as inflation. Because a rise in the overall price level reduces the purchasing power of money, inflation is frequently referred to as a rise in prices. The opposite of inflation, deflation is a sustained decline in the level of prices for goods and services. One frequently used measure of inflation is the inflation rate, which is the annualized percentage change in a general price index. Because not all prices increase at the same rate, the consumer price index (CPI) is widely used for this purpose. Wages in the US are also determined by the employment cost index.

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