Inflation rates can vary quite a bit across the world, from hyperinflation to zero or even below zero. But is there anything systematic about these differences among countries?

To begin to look into this question, we created the FRED graph above to display average inflation rates across four categories of countries based on their income: low, lower middle, upper middle, and high.

We gain two quick and easy observations:

• The richer the economy, the lower the inflation.
• The richer the economy, the more stable the inflation.

But this simple exercise can’t establish causality, so we’re left with more questions:

• Does a healthy economy lead to beneficial inflation outcomes?
• Do high incomes lead to low and stable inflation?
• Do other forces drive, separately, incomes and inflation, such as sound economic and monetary policy, a diversified economy, and a strong state that can enforce its laws?

Find research on this topic among our St. Louis Fed publications, FRASER digital archive, and Fed in Print.

How this graph was created: Search FRED for “inflation low income.” From the graph, click “Edit Graph” and then open the “Add Line” tab to search for “inflation lower middle income.” Repeat with “inflation upper middle income” and “inflation high income.”

Suggested by Christian Zimmermann.