What is inflation? Explained for kids
Inflation is when many prices rise over a longer time. The money doesn’t get smaller. It buys less. Daria nails it: Not one thing by a lot. Many things by a little. One expensive carrot is not inflation yet. A whole basket getting more expensive is another matter.
Good to know: we explain how things work in Germany, where the books are set. Rules and numbers can be different where you live.
How the guinea pigs explain it in Volume 5: Everything Costs More!
What is inflation? Explained simply for kids
Mr. Grey puts it like this: Inflation is when lots of prices go up over a longer period of time. The money doesn’t get smaller. It buys less. Daria already nailed it earlier: Not one thing by a lot. Lots of things by a little. Filip’s photos show exactly that: a scoop of ice cream costs €1.70 instead of €1.60, a bread roll 47 cents instead of 45, a bus ticket €1.95 instead of €1.90.
Is a single price increase already inflation?
No. Hay has gotten more expensive because the summer was dry and less of it grew. Next year it may get cheaper again. That’s a single price increase. Mojito just says: Not inflation. That’s expensive hay. Daria writes down the book’s key sentence: One expensive carrot is not inflation yet. And Christian adds: A whole expensive shopping basket is more like it.
What is a shopping basket, and how is inflation measured?
Daria and Christian compare a basket with a basket: two bunches of carrots, two cucumbers, a sack of hay, a sack of bedding. Last summer it cost €10.00, then €10.40, and most recently €11.30. For a whole country there’s a big basket with food, rent, clothes, tickets and much more. In Germany, the Federal Statistical Office calculates it, and the number is called the inflation rate. In a small basket, a single price increase looks bad. In the big one, lots of things even each other out.
Why do prices go up?
Because everything that goes into them is getting more expensive, says Knut: hay from the farmer, electricity for the greenhouse, gas for the delivery van. With hay, there’s also the dry summer. There isn’t much hay, and lots of people want it. Few goods and lots of buyers, and the price goes up. Mrs. Müller, the dental technician, knows this from her own work: Sometimes it isn’t the work that has gotten more expensive. Sometimes it’s the materials.
- Inflation means many prices, over a longer time. One expensive carrot on its own isn’t inflation.
- It’s measured with a shopping basket: always the same things, priced again and again.
- Prices go up when there isn’t much of something and lots of people want it, or when everything around it gets more expensive.
Inflation
inflation
In the books, every paragraph is in German with the English right below it. That way you pick up new words in both languages along the way.
Your turn: take the quiz
No account, no score, nothing gets saved. Just tap an answer.
1. Hay costs more because the summer was dry. Is that already inflation?
2. How do you measure whether everything is getting more expensive?
3. What happens to money when there’s inflation?
Volume 5: Everything Costs More!
Why prices go up and the same money buys less later on. For kids ages 10 and up, bilingual German and English, 90 pages, illustrated in full color throughout.
