Purchasing power
How much a unit of money can buy. Inflation reduces it.
2 min read · Reviewed September 2026
In plain words
Purchasing power measures what money can actually buy. If prices double, purchasing power halves — the same banknote buys half as much. Inflation erodes purchasing power; deflation increases it.
Frequently asked questions
How much has purchasing power fallen since 2020?
In the US, the price level rose roughly 21% between January 2020 and end-2024, meaning $100 in 2020 could only buy goods worth about $83 by late 2024. Use our calculator to check any country and year range.
Further reading