# How Inflation Works - Inflation is the change in prices of goods and services - Demand and Supply in the components of the goods and services - Supply-side - Cost of inputs: commodities, labour, capital, other manufactured goods - technological advancement or enhanced efficiency/productivity - Demand side - Growing population, - Demographic structure - increased real income (as a result of efficiency improvements elsewhere, or at the expense of capital, shift in relative factor prices?) - Currency aspects - Trust in value - fear of zero value due to sanctions? - amount in circulation - too much chasing too few goods - lag effects ##### Related - [[Hyperinflations and Political Crises]] - [[Money]]