Lots of things can cause inflation, but the main reason we have inflation is because we deliberately cause it by (effectively) printing money. Some economists h

Lots of things can cause inflation, but the main reason we have inflation is because we deliberately cause it by (effectively) printing money. Some economists have decided that a target of 1-2% per year is ideal to keep people spending and investing rather than stuffing their money in the proverbial mattress and hoarding it. Deflation is meant to be avoided at all costs. This has been decided to be the ideal balance to keep the economy as strong as possible. Personally, I am sceptical that there is much difference between 1% inflation and 1% deflation, but I am not an economist.