Glossary of economics

Ever wondered why your savings don't keep up with rising prices?

Imagine saving money to buy a new bike, but the price keeps going up because of inflation.

Your money buys less over time as prices rise, which is why your savings might not seem to grow as much as you'd expect.

Example

You save 100, but the bike now costs 110 due to inflation.

Remember this

The Fisher Effect explains that real interest rates remain stable despite inflation changes.

Text adapted from Wikipedia, licensed under CC BY-SA 4.0.

Related concepts

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Deflation

Deflation increases the real value of money

Educational content, not financial advice.

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