<P> Economists generally believe that high rates of inflation and hyperinflation are caused by an excessive growth of the money supply . Views on which factors determine low to moderate rates of inflation are more varied . Low or moderate inflation may be attributed to fluctuations in real demand for goods and services , or changes in available supplies such as during scarcities . However , the consensus view is that a long sustained period of inflation is caused by money supply growing faster than the rate of economic growth . Inflation may also lead to an invisible tax in which the value of currency is lowered in contrast with its actual reserve ultimately , leading individuals to hold devalued legal tender . </P>
during periods of high inflation the money supply typically has been
growing faster than the rate of economic growth