In Civ4 inflation is the general rise in costs involved in your empire. The rate is the same every game (given the same game speed). You can NOT do anything about inflation. Feel free to adjust the costs that inflation affects (through civics, army size, etc.). The bottom line is that you want greater income than expenses.
They are NOT based on real life economic inflation which varies due to societal conditions, supply & demand. It would not be appropriate for a mechanized infantry unit in the 20th century to cost no more in upkeep than an archer unit near the beginning of the game.