Short answers, pulled from the story.
Inflation is an increase in the average price of goods and services, which corresponds to a reduction in the purchasing power of money. It is most commonly measured using a consumer price index (CPI), calculated as the percentage change in the price of a weighted basket of representative goods and services over time. For example, the U.S. CPI rose from 202.416 in January 2007 to 211.080 in January 2008, an inflation rate of approximately 4.28 percent.
Economists identify several causes: increases in the money supply, demand shocks such as expansionary fiscal or monetary policy, supply shocks such as energy crises, and changes in inflation expectations. Milton Friedman famously argued that inflation is always and everywhere a monetary phenomenon, while Keynesian economists emphasize aggregate demand. The modern consensus recognizes demand shocks, supply shocks, and inflation expectations as all potentially important.
Hyperinflation refers to extreme, out-of-control inflation rates, normally defined as surpassing 50 percent monthly. Notable historical examples include the hyperinflation in the Weimar Republic of Germany, the largest paper money inflation of all time in Hungary after World War II, and Venezuela, which recorded an annual inflation rate of 833,997 percent as of October 2018.
During the Malian king Mansa Musa's hajj to Mecca in 1324, he passed through Cairo accompanied by thousands of people and nearly a hundred camels carrying gold, spending and giving away so much that the price of gold in Egypt collapsed. A contemporary Arab historian recorded that the gold mithqal, previously above 25 dirhams, fell to 22 dirhams or less and stayed depressed for roughly twelve years.
The Phillips curve, based on evidence published by Alban William Phillips in 1958, describes a negative relationship between inflation and unemployment, suggesting that lower unemployment comes at the cost of higher inflation. The curve accurately described U.S. experience in the 1960s but failed to explain the stagflation of the 1970s, when both unemployment and inflation rose simultaneously. Economists concluded that the breakdown occurred because rising inflation expectations were built into wages and contracts, eroding the trade-off.
Climateflation is a term first used by Isabel Schnabel of the European Central Bank to describe price rises directly caused by climate-related disruptions such as heat, droughts, and floods that reduce agricultural productivity. Research found that climate-driven heat increases in Europe during 2022-2023, averaging 1.25 degrees Celsius above baseline with peaks up to 5.7 degrees, contributed about 0.7 percent to European food prices and about 0.3 percent to overall inflation. The same study estimated that warming predicted by 2035 could increase these effects by 30-50 percent.