Okuzeka
Economics vocabulary · Inflation and Prices

Price stability

Meaning in economics, with examples

nounCommon term

In economics, price stability means: A situation in which the general level of prices rises only slowly and predictably, so that inflation does not disturb economic decisions.

In Turkish: fiyat istikrarı

How it is used

The main legal objective of many central banks, including the Central Bank of the Republic of Türkiye and the European Central Bank. In advanced economies it is usually defined as inflation of around 2%, not zero. Central banks aim to achieve, maintain or restore price stability.

Example sentences

  1. The bank's primary objective is to achieve and maintain price stability.

  2. Without price stability, firms find it hard to plan investment.

Common collocations

  • achieve price stability
  • maintain price stability
  • restore price stability
  • commitment to price stability
  • inflation targetThe rate of inflation that a central bank officially aims to achieve over the medium term, such as 2% a year.
  • central bankThe national institution that issues a country's currency, sets the main interest rate and works to keep prices and the financial system stable.
  • monetary policyThe actions a central bank takes to influence interest rates, the money supply and credit in order to control inflation and support the economy.
  • inflationA general and continuing rise in the prices of goods and services in an economy, which means each unit of money buys less over time.

More terms: Inflation and Prices

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