Guide to Analysing Companies

I
INDIVIDUAL RETIREMENT ACCOUNT
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types of ira are restricted according to a holder’s earnings and
other circumstances.
Inflation
A systemic rise in the price of goods and services over time.
Economists still differ in their views of what causes inflation.
There are two main theories.
 Cost push, which asserts that increases in the cost of the
factors of production are the main cause. This includes
the prices of raw materials and any rise in property rents.
More importantly, it includes rises in wage costs. As a
result, employers argue that any rise above the rate of
inflation is itself inflationary.
 Demand pull, which asserts that consumers are
demanding more of a product or service than is being
produced and are thus pushing up prices. They can only
do this if the amount of money in the economy exceeds
the growth in production plus the rate of inflation.
Inflation redistributes wealth and income. It hits hardest
those on fixed incomes (because the purchasing power of their
income is eroded) and benefits most those heavily in debt
(because the value of their borrowings diminishes the higher
the rate of inflation, even though the cost of servicing the debt
may rise because of higher interest rates). It also undermines
the basis for calculating value. It is not in itself, however, a de-
terrent to economic growth. Many developing countries have
successfully combined high growth with high inflation. Indeed,
many economists regard deflation as a bigger threat.
Inflation is the one form of taxation that 
can be imposed without legislation. 
Milton Friedman
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INFLATION
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