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What exactly is inflation, and are interest rates the only option for dealing with it?

By Luke Hartigan, Senior Lecturer in Economics, University of Sydney

Just when we thought it was safe to return to the supermarket aisle, it seems inflation has come back to bite us again. Worse, the Reserve Bank of Australia (RBA) predicts it will linger for longer than previously expected, adding to cost-of-living concerns.

So, what is inflation, and what causes it? Do we have to worry about inflation? And if so, what are the options for getting it back under control?

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