To understand this we need to take real life example.

Inflation is just like your body temperature. Its existence is a sign of life and in case of an economy, it’s vibrancy.

Any economy which will have healthy growth, invariably exhibits inflation just like your body temperature.

Only condition is – it should be just right.

High inflation is like running a fever. When it gets out of control, it destroys everything from buying power in the hands of individuals to profitability of industries.

An inflation level of 3-4 % is considered healthy. When it gets out of this band, it is a sign of some underlying disease and needs treatment.

The treatment in this case is done by doctors called “central banks”

On the contrary a no inflation or deflation is a sign of disease too. It is an indication of lack of demand.

The whole developed world including US, Europe and Japan are suffering from this low inflation.

It is strange that half of the world led by US is struggling to kick in inflation while rest of the developing world like India and china are struggling to control the same.

One man’s food is another man’s poison.