THE IMPACT OF INFLATION ON THE ECONOMY AND STANDARD OF LIVING

Inflation represents one of the most significant macroeconomic challenges of modern economies, with direct and indirect implica-tions for economic growth, market stability, and the standard of living of the population. As a continuous increase in the general price level, inflation affects the real value of money, income dis-tribution, and economic decision-making at the level of individu-als, companies, and the state. The aim of this paper is to analyze the causes, dynamics, and consequences of inflation, with a par-ticular focus on its impact on economic activity and the quality of life of citizens. This paper employs descriptive, analytical, and comparative meth-ods, using secondary data sources from relevant scientific litera-ture and reports of international and national institutions. Special attention is given to distinguishing between the short-term and long-term effects of inflation, as well as its redistributive conse-quences.