The+Causes+of+Inflation

**Inflation**
Inflation is a term used to describe either a rise in price level or a decrease in value of money. There are many different causes for inflation such as response to demand, rise in production costs, and paying for national debts. Sometimes, even the decrease in importance and cost of money can lead to inflation.

**Causes of Inflation**
In the case of the French Revolution, one of the most significant causes was the government constantly raising product costs in order to pay for national debt. In other words, inflation was a debt-fighting instrument. France was involved in a series of very costly wars such as the War of Austrian Succession, the Seven Years War, the American War for Independence, and the French and Indian War. The War of Austrian Succession, for example, approximately costed 1 billion livres. The problem is, however, most of this money was borrowed from wealthy noblemen at very high interest rates. This was the start of the national debt which France had faced. The French and Indian War was even more costly: 1.8 billion livres. Towards the end of this war, at about 1763, France's national debt totaled 2.3 billion livres. As more and more wars France was involved in, the higher and higher the debt got. Still a strong believer and supporter that war is necessary for superpower and maintaining the chief function of a country, France continued its participation in wars. It got to the point where the French government had to devalue the currency, which actually was a rise in product cost.



**Example of Inflation in France**
The most significant event of inflation in France was probably that of the bread. By 1789, bread prices rose 88 percent, eventually forcing peasants to work even harder just to provide food for themselves and their families.



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