Any definition of inflation that ignores everything but supply and demand is too simple. Include velocity of money, interest rates, the fed’s dual mandate and y

Any definition of inflation that ignores everything but supply and demand is too simple. Include velocity of money, interest rates, the fed’s dual mandate and you get close to a useful understanding. Any discussion about inflation that ignores those elements probably just adds to the general public’s woeful ignorance. Inflation is the feds’ job, if you have high inflation, the fed failed. Fluctuating supply and demand should have minimal impact on inflation, unless the fed screws up by, for example, trying to overshoot “full employment” when all the inflation alarm bells are already ringing. Arguably that is what happened, and there’s a general consensus about this in circles that actually have a clue, current and former fed members.