Many political pundits point to inflation as a sign of an unstable economy, but this is far from the truth. In economics inflation, or price level increase, is often associated with an increase in the monetary base, though this is a simple approach. Inflation is commonly seen in growing economies. Why? As the production of a nation increases more income is generated. This income allows for goods to be consumed with an equilibrium point that is higher up the supply curve. We are talking about a growing economy, not an expanding economy, so the economy is growing with a positive margin. This, inherently, means demand can outpace supply, which is why the equilibrium climbs up the supply curve. This translates to the prices of goods rising, which is inflation. The question becomes, when is inflation bad? This is a difficult question to answer and relies heavily on the perspective of the person analyzing it. Some economist point to when inflation is dramatically outpacing the economy as the point to raise alarms and other take a more direct approach and say inflation becomes dangerous when it is driven by a nation printing money to pay its bill, which is called seigniorage. Overall inflation, in good measure, is a positive sign for the economy.