Economics Made Easy: Why is inflation a problem?

Here's an example of economics in plain English. Why should you worry about inflation, and why is the Government always worried about it?

Well those of us that are older get it, because they've seen it. However, the less than 35 yr old age group has no idea what the real issue is (unless you are an economics guy.)

I can go into details, but I am a fan of the simple explanation.

Inflation breeds unemployment. And while nobody likes a stock market crash, we can still typically afford to buy groceries. Losing jobs, however, is unbearable for the market.


Look at the graph below. Inflation rises just before Unemployment rises.