Inflation is one of the most malignant phenomena that affects various economic processes such as production, savings, investments, income and expenses, and therefore the economy as a whole. The first chapter contains the most important information about money because first we need to know a little bit more about money in order to be able to know about the very phenomenon that applies to it. After that, the reader will get acquainted with the historical overview of inflation, because it is important to understand its causes and the methods that generations in the past used to suppress it. In the third chapter, there are types of inflation. Inflation is divided into moderate, galloping and hyperinflation, and there are also other terms such as stagflation, incession and deflation. The worst of the above is hyperinflation, in which the price index increases by more than a million times. The opposite of inflation is deflation, which occurs as a result of a decrease in the amount of money in circulation, which causes a drop in the general level of prices. It can be absolute and relative. Excessive printing of money, increased production and various external economic shocks (war, epidemic) are cited as the main causes of inflation. Inflation has an extremely negative effect on production and distribution, but when we talk about consumption, it has a positive effect in a certain way, because people have less and less confidence in money and prefer to have it in the form of property. The epidemic of the Covid-19 virus had a strong contribution to the creation of inflationary pressures on the Croatian economy. The isolation and economic slowdown measures of Croatian government in order to protect health, contributed to the destabilization of the economy, which then further affected savings and investments. The war in Ukraine also did not contribute to suppressing the inflation that took off during the epidemic period. The prices of energy products and basic necessities for life jumped in record percentages and led the countries of the European Union to make radical moves. At the very end, it is analyzed how people perceive inflation and what the consumer price index and the Philipps curve are.