The inflation rate is the rate of increase in aggregate prices (things becoming more expensive over time), primarily driven by an increase in the money supply. The effect of inflation on an economy is debatable, and can have positive and negative implications. It generally moves very closely with a growth in the money supply, so that real prices are not heavily affected by inflation in the long-run. Inflation is not related to technological advancement, but the nominal change in prices.
New methods, advanced devices, and firms' incentive to become more productive all logically contribute to more advanced technology.
