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That implies there is a single factor that “causes” inflation. That’s not true. There are always inflationary and deflationary impacts on prices. Oil and boome

That implies there is a single factor that “causes” inflation. That’s not true. There are always inflationary and deflationary impacts on prices. Oil and boomers leaving the workforce and covid derailing shipping and monetary policy and 1000 other things can all be pushing up prices at the same time.

refurb 4y ago
But prices going up alone is not inflation. “Inflation is a general increase in prices and fall in the purchasing value of money.” The key is general. Increases in prices of select items due to supply or demand is not inflation.
- kasey_junk 4y ago
  All general means in that sentence is that the price increasing factors are more prevalent than the price decreasing ones. If there are several structural issues (eg greatest workforce change in 3 generations, war in Europe, worldwide pandemic, etc) they can all contribute to a general inflationary (or deflationary) trend. It’s a very particular economic school that says only monetary policy causes inflation. And we have years and years of loose policy that didn’t put inflation on the front burner for economists to argue about.
  - refurb 4y ago
    All general means in that sentence is that the price increasing factors are more prevalent than the price decreasing ones. It doesn't. Inflation is an erosion of value of the currency. General means "across the board" because the currency is worth less. Sure, if there is a glut of apples and the price drops you may not notice the inflation baked into the price, but it's there. And if there is a shortage of oranges the price may jump higher than inflation, but that doesn't mean inflation is higher. People seem to be confusing general prices changes due to other factors with inflation. It's not inflation unless the currency is worth less.
    - kasey_junk 4y ago
      You’re arguing circularly. Currencies are worth less when things cost more. Things cost more when prices increase. If a central committee increased the price on everything without changing the monetary supply that would still be inflation. Similarly if the invisible hand does it or if there is broad collusion amongst producers.
      - refurb 4y ago
        Its not circular because its different drivers of price. If gas prices rise the purchasing power of my dollar remains the same for most items. If inflation goes up, my dollar buys less of everything.

refurb 4y ago

But prices going up alone is not inflation. “Inflation is a general increase in prices and fall in the purchasing value of money.” The key is general. Increases in prices of select items due to supply or demand is not inflation.

kasey_junk 4y ago
All general means in that sentence is that the price increasing factors are more prevalent than the price decreasing ones. If there are several structural issues (eg greatest workforce change in 3 generations, war in Europe, worldwide pandemic, etc) they can all contribute to a general inflationary (or deflationary) trend. It’s a very particular economic school that says only monetary policy causes inflation. And we have years and years of loose policy that didn’t put inflation on the front burner for economists to argue about.
- refurb 4y ago
  All general means in that sentence is that the price increasing factors are more prevalent than the price decreasing ones. It doesn't. Inflation is an erosion of value of the currency. General means "across the board" because the currency is worth less. Sure, if there is a glut of apples and the price drops you may not notice the inflation baked into the price, but it's there. And if there is a shortage of oranges the price may jump higher than inflation, but that doesn't mean inflation is higher. People seem to be confusing general prices changes due to other factors with inflation. It's not inflation unless the currency is worth less.
  - kasey_junk 4y ago
    You’re arguing circularly. Currencies are worth less when things cost more. Things cost more when prices increase. If a central committee increased the price on everything without changing the monetary supply that would still be inflation. Similarly if the invisible hand does it or if there is broad collusion amongst producers.
    - refurb 4y ago
      Its not circular because its different drivers of price. If gas prices rise the purchasing power of my dollar remains the same for most items. If inflation goes up, my dollar buys less of everything.