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Your link doesn't contradict the price-inflation view. > its original meaning - a rise in the general price level caused by an imbalance between the quantity o

Your link doesn't contradict the price-inflation view. > its original meaning - a rise in the general price level caused by an imbalance between the quantity of money and trade needs and in the PDF: > an inflating currency has but one origin — the central bank— and one solution— a less expansive money growth rate This is inherently problematic because there's no clear self-contained reason that inflating currency is a problem that needs a solution. If it failed to lead to price inflation or other effects, then it doesn't matter. > A good’s real price, or value, was defined as the effort required to produce it Well, people have and do talk like that, but it's dumb. That definition fits "cost" not "price". But anyway, I don't need to be picky. Sure, I accept that "inflation in money supply" is not only reasonable use of the metaphor of inflation but is indeed historically how it was used. And as the paper accepts, the definition has changed. That's how the world works. I still suspect that even 100-150 years ago, if inflation in the money supply didn't have any affect on prices, people would not have said the same things about it. All the quotes seem to assume that money supply inflation leads to price increase. As to the use today, it's unarguable. See https://www.dol.gov/general/topic/statistics/inflation https://www.dol.gov/general/topic/statistics/inflation > Inflation can be defined as the overall general upward price movement of goods and services in an economy. That simply is the definition today. And I think it was always the implication anyway.

sparkie 5y ago
The link I selected was just the first thing that came up when I looked for a citation. I knew as a matter of fact that it was the case before making the search, purely from having read the work of actual economists, who have for decades, and still to this day, use the word inflation to mean the increase in the supply of money. It has always been used in this way by the Austrian school of economics. Most prominently, in Human Action[1] (1940), perhaps the best book on economics to exist. Mises makes a deliberate effort to encourage his readers to use the term properly. Here are some ways he describes inflation (1949 English translation): "In the course of a monetary expansion (inflation) the first reaction is not only that the prices of some of them rise more quickly and more steeply than others. It may also occur that some fall at first as they are for the most part demanded by those groups whose interests are hurt." "From this point of view the term inflation was applied to signify cash-induced changes resulting in a drop in purchasing power" "The terms inflationism and deflationism, inflationist and deflationist, signify the political programs aiming at inflation and deflation in the sense of big cash-induced changes in purchasing power." "What many people today call inflation or deflation is no longer the great increase or decrease in the supply of money, but its inexorable consequences, the general tendency toward a rise or a fall in commodity prices and wage rates. This innovation is by no means harmless. It plays an important role in fomenting the popular tendencies toward inflationism." "The second mischief is that those engaged in futile and hopeless attempts to fight the inevitable consequences of inflation - the rise in prices - are disguising their endeavors as a fight against inflation. While merely fighting symptoms, they pretend to fight the root causes of the evil. Because they do not comprehend the causal relation between the increase in the quantity of money on the one hand and the rise in prices on the other, they practically make things worse." "It is obvious that this new-fangled connotation of the terms inflation and deflation is utterly confusing and misleading and must be unconditionally rejected." [1]:https://mises.org/library/human-action-0 https://mises.org/library/human-action-0
- quadrangle 5y ago
  I think the reason for the semantics comes from the assertion that increasing the money supply always correlates (usually argued as causes) price increases. In one of your quotes "inexorable consequence". Are there examples of people talking about money supply inflation where they aren't bringing up price at all? I mean, the argument that I'm making is that nobody cares at all about money supply in itself, they only care about the consequences. So, it makes sense that the language evolved to focus on the actual issue that matters. The assertion that the connotation is "utterly confusing and misleading" seems quite hyperbolic. And the assertions about "inexorable consequence" and so on are similarly extreme in their overconfidence. At any rate, given that price index and such is very clearly the case now (as in the government link I posted earlier), I will stick to my assertion that today it does mean price increases. But I am willing to qualify that and acknowledge that it's not a universal or historically consistent meaning.

sparkie 5y ago

The link I selected was just the first thing that came up when I looked for a citation. I knew as a matter of fact that it was the case before making the search, purely from having read the work of actual economists, who have for decades, and still to this day, use the word inflation to mean the increase in the supply of money. It has always been used in this way by the Austrian school of economics. Most prominently, in Human Action[1] (1940), perhaps the best book on economics to exist. Mises makes a deliberate effort to encourage his readers to use the term properly. Here are some ways he describes inflation (1949 English translation): "In the course of a monetary expansion (inflation) the first reaction is not only that the prices of some of them rise more quickly and more steeply than others. It may also occur that some fall at first as they are for the most part demanded by those groups whose interests are hurt." "From this point of view the term inflation was applied to signify cash-induced changes resulting in a drop in purchasing power" "The terms inflationism and deflationism, inflationist and deflationist, signify the political programs aiming at inflation and deflation in the sense of big cash-induced changes in purchasing power." "What many people today call inflation or deflation is no longer the great increase or decrease in the supply of money, but its inexorable consequences, the general tendency toward a rise or a fall in commodity prices and wage rates. This innovation is by no means harmless. It plays an important role in fomenting the popular tendencies toward inflationism." "The second mischief is that those engaged in futile and hopeless attempts to fight the inevitable consequences of inflation - the rise in prices - are disguising their endeavors as a fight against inflation. While merely fighting symptoms, they pretend to fight the root causes of the evil. Because they do not comprehend the causal relation between the increase in the quantity of money on the one hand and the rise in prices on the other, they practically make things worse." "It is obvious that this new-fangled connotation of the terms inflation and deflation is utterly confusing and misleading and must be unconditionally rejected." [1]:https://mises.org/library/human-action-0 https://mises.org/library/human-action-0

quadrangle 5y ago
I think the reason for the semantics comes from the assertion that increasing the money supply always correlates (usually argued as causes) price increases. In one of your quotes "inexorable consequence". Are there examples of people talking about money supply inflation where they aren't bringing up price at all? I mean, the argument that I'm making is that nobody cares at all about money supply in itself, they only care about the consequences. So, it makes sense that the language evolved to focus on the actual issue that matters. The assertion that the connotation is "utterly confusing and misleading" seems quite hyperbolic. And the assertions about "inexorable consequence" and so on are similarly extreme in their overconfidence. At any rate, given that price index and such is very clearly the case now (as in the government link I posted earlier), I will stick to my assertion that today it does mean price increases. But I am willing to qualify that and acknowledge that it's not a universal or historically consistent meaning.