Inflation is a rise in the general level of prices for goods and services over time, resulting in a loss of purchasing power of a currency. There are two main types of inflation: demand-pull inflation, which occurs when demand exceeds supply, and cost-push inflation, which happens when input costs rise, such as from increasing wages, taxes, or imported inflation. Deflation is the opposite of inflation and refers to a decline in general price levels, while stagflation describes slow economic growth accompanied by rising prices.