Talk:Inflation

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[edit] Bogus definition of Inflation

Inflation is a rise in the general level of prices of goods and services in a given economy over a period of time. This is always a shallow definition of inflation, because it never points at the causation, namely the corrupt fractional-reserve banking system, that embraces monetary inflation. The central banks increase the Dollars / Currency in circulation. This definition is but the consequence of their act of monetary manipulation. —Preceding unsigned comment added by 67.187.16.35 (talk) 21:53, 2 March 2008 (UTC)

Idealogical reasons aside, the correct definition of "inflation" is directly related to the correct definition of "deflation". Inflation is defined as "an increase in the money supply, which often results in higher prices of goods and services." Deflation is defined as "a decrease in the money supply, which may result in lower prices of goods and services."
In 2008, the reason the Federal Reserve and U.S. Congress are injecting money into the economy (increasing the money supply) is that they fear the adverse effects of deflation more than the effects of inflation.Cadwallader (talk) 20:20, 29 April 2008 (UTC)
Inflation is certainly not just an increase in the money supply. If the money supply increases at the exact rate required by the increase in new real value created, then there will be zero inflation.
The DEFINITION of inflation is: Inflation is the destruction of the value of monetary items as well as constant real value non-monetary items over time. Inflation has two components: a monetary component: cash inflation and a non-monetary component: Historical Cost Accounting inflation.
The CAUSE of cash inflation is always an excessive increase in the money supply. What causes an excessive increase in the money supply is a complex economic process.
Historical Cost Accounting inflation is caused by the combination of inflation and accountants´ implementation of the stable measuring unit assumption - an Historical Cost Accounting practice.
It also does not "often" results in higher prices of goods and services. Inflation, always being caused by an excessive increase in the money supply, always results in an increase in the general level of prices, which can be described as an effect of inflation.
The EFFECT of cash inflation: Cash inflation destroys the real value of monetary items at the rate of inflation over time.
The EFFECT of Historical Cost Accounting inflation: HCA inflation will result in the destruction by accountants of:
(a) the real value of all companies´ retained income, share premium, capital reserves and other [excluding (b)] constant real value non-monetary items never updated. This destruction is at the rate of inflation. Plus
(b) the destruction of the real value of the issued share capital of all companies with no well located and well maintained land and/or buildings or other variable real value non-monetary items able to be revalued at least equal to the original real value of each contribution of issued share capital. This destruction is at the rate of inflation. Plus


(c) the destruction of a further unknown amount (less than the inflation rate) in the real value of constant real value non-monetary items not fully updated, e.g., salaries, wages, rents, fees, royalties, retainers, income taxes, company taxes, value added taxes and all other constant items not fully updated.
To summarise: The EFFECT of Historical Cost Accounting inflation is the destruction of value in constant items never or not fully updated.
Deflation is an excessive decrease in the money supply, which always results in a decrease in the general level of prices.

Reference:[1]

Nicolaas Smith (talk) 21:08, 29 April 2008 (UTC)

The "definition" as it appears in the article is not the definition, but the cause and effect of cash inflation only.

Nicolaas Smith (talk) 21:28, 29 April 2008 (UTC)

[edit] Monetary inflation

Seeing as the first references in economic theory to inflation (Ricardo, School of Salamanca, Classical school, Physiocrats) used it to refer to what today is known as "monetary" inflation, and that the definition has only changed in the last 50-70 years, I think some reference should be made to this here. --89.128.216.95 22:16, 15 September 2007 (UTC)


[Monetary]


TRANSFINANCIAL ECONOMICS PROJECT

Could inflation levels be directly controlled but allowing prices to self-adjust naturally as much as possible?

http://kheper.net/essays/Transfinancial_Economics.html —Preceding unsigned comment added by 212.22.16.194 (talk) 18:03, 4 January 2008 (UTC)

[edit] INCOMPRNSIBILE!

This article is ununderstandable!!! 19:31, 9 September 2007 (UTC)

haha rad —Preceding unsigned comment added by 58.165.38.119 (talk) 12:38, 30 November 2007 (UTC)

That's unpossible! 81.230.43.177 (talk) 19:00, 11 June 2008 (UTC)

[edit] Argentina

Graphic is out of date, Argentina's inflation nowadays is between 5% and 10% (source: INDEC, national institute for statistics and census). If someone could change that, I would be very pleased.

[edit] Redirection

Why is a Wikipedia search for "economic stability" redirected to this page on "Inflation"? Does some Wikipedia administrator consider "inflation" synonomous with "economic stability"? Whether this assumption is correct or not, why is someone imposing their sovereign bias into the matter without any sort of discussion? While I have no means to alter this automated "redirection", I do strongly object to such arbitrary imposition of personal bias. While I could post a "tag" to publicize my objection, an invitation for quiet discussion seems more appropriate, for now. Does anyone care to contribute before I take further action? David Kendall (talk) 03:26, 8 December 2007 (UTC)

Well, one aspect of economic stability - price stability - is synonymous with a low and predictable rate of inflation. —Preceding unsigned comment added by 203.20.253.5 (talk) 07:58, 20 February 2008 (UTC)

[edit] Austrian Economics Perspective

I always find it interesting that inflation always has such smug defintions: "Inflation is defined as a sustained increase in general price levels for some set of goods and services in a given economy over a period of time." What's wrong with this picture? It's simply outlining the result or consequence of inflation, and not the causation, namely over-expansion of the monetary supply. —Preceding unsigned comment added by 67.187.16.35 (talk) 09:50, 9 December 2007 (UTC)

I always find in interesting that only those self-identifying with the Austrian perspective find it necessary to reiterate a rather obvious point, that the result is distinct from the cause. As for the causes, they are discussed in the section entitled "causes."--Gregalton (talk) 10:01, 9 December 2007 (UTC)

It is not clear that the claimed effect (higher prices) always follows from the cause (increase in the money supply). If the money supply were to increase at the same rate as wealth is produced (economic growth), then prices would remain essentially fixed. A combined definition would hold that inflation exists when the money supply increases relative to the amount of goods and services available. This is distinct from particular attempts to measure the effect of inflation, such as the (badly biased) Consumer Price Index. --FOo (talk) 20:59, 12 January 2008 (UTC)

So when you say "relative to", you mean "over-expansion"? Isn't that what the IP user above said? The issue you mention - measurement - is of course distinct. Any attempt to measure anything is likely to be wrong, and some measurements (including, possibly, CPI) are biased. But that's a separate issue. Bias doesn't negate the definition.--Gregalton (talk) 08:26, 13 January 2008 (UTC)

[edit] Map is wrong

I've found many errors in the map. Using CIA factbook as a source with 2006 figures (the map cites no sources), Russia is under 10%, Brazil is under 5%, Turkey is over 10%, Tajikistan is above 10%, Ukraine is below 10%, Libya is over 2%, India is over 5%..ah hell I just keep finding more. I'll work on fixing it up. —Preceding unsigned comment added by Sbw01f (talk • contribs) 13:45, 18 December 2007 (UTC)

There were about 40+ errors which I corrected, I may have missed some but that should do for now. —Preceding unsigned comment added by Sbw01f (talk • contribs) 15:51, 18 December 2007 (UTC)

[edit] Causes

Inflation is caused by supply and demand. It happens when businesses raise their prices not cause they have to but because they can. They know they will sell the same amount of their product to whatever demographic they are targeting as long as the prices are not too high which would be any more than they are now in most capitalist countries. 206.196.142.221 (talk) 08:17, 27 December 2007 (UTC)

I don't mean to be rude, but this comment betrays a profound ignorance of the subject matter of economics. It implies that inflation cannot occur unless the demand for a business's product is completely insensitive to its price; in fact, during periods of inflation, the prices of discretionary (ie price-sensitive) products also increase. It also states that current prices in most capitalist countries are not "too high"; most capitalist countries are currently experiencing positive levels of inflation, meaning that prices will be higher next year - will they still not be "too high" then? —Preceding unsigned comment added by 203.20.253.5 (talk) 07:41, 8 January 2008 (UTC)

Stop defending greed. 70.59.0.44 (talk) 02:47, 7 February 2008 (UTC)

Greed will exist whether or not anyone defends it. If a shopkeeper is greedy for wanting more money for his/her goods, isn't a customer greedy for wanting more goods for his/her money? —Preceding unsigned comment added by 203.20.253.5 (talk) 00:36, 8 February 2008 (UTC)

[edit] Inflation... definition

In the first paragraph, this article reads:

 "It should be noted that the result of inflation are higher prices."

Surely the causative relationship between inflation and higher prices flows in the reverse direction. i.e. higher prices cause inflation, rather than inflation causes higher prices? —Preceding unsigned comment added by 123.193.8.12 (talk) 17:19, 7 January 2008 (UTC)

The introduction of this article is poorly written. It assumes that the term "inflation" refers to the increase in the money supply. The problem with this analysis is that it fails to recognize certain inflationary phenomena such as negative supply shocks. Inflation is defined as the increase in general price levels of goods. Monetary inflation should only be noted as one of the primary causes of inflation. A lot of the econ related articles on Wikipedia are becoming increasingly Austrian. Dotter (talk) 21:00, 7 January 2008 (UTC)

Debating whether inflation is caused by rising prices (or vice versa) is like debating whether rain is caused by water falling from the sky (or vice versa). Inflation is defined as rising prices (by everyone except the Austrians). Inflation is caused by the supply of money expanding faster than the demand for it. —Preceding unsigned comment added by 203.20.253.5 (talk) 07:20, 8 January 2008 (UTC)

By the way, this article does NOT ignore the Austrian/classical definition. That alternative definition is explained in Section 1, "Related definitions". But the definition stated in the first sentence of the article is the same one given in virtually any introductory macroeconomics textbook today.--Rinconsoleao (talk) 08:48, 8 February 2008 (UTC)

[edit] Introduction

I feel like the introduction to this article kind of "jumps in" to the topic of inflation. Maybe a nice definition or summary would be a better way to start it off.

71.11.215.216 (talk) 20:02, 7 January 2008 (UTC)

I undid the deletion of the previous introduction. Dotter (talk) 21:17, 7 January 2008 (UTC)

[edit] US Inflation is grossly under-reported

The US has moved to "hedonistic inflation" or measuring only those factors from which we derive pleasure. This has resulted in a gross mis-representation of actual inflation numbers. Expect actual inflation to hit 10% by year-end 2008.

[edit] Inflation and exchange rates

China underwent record inflation last year at 4.8% per year.[2] The United States inflation rate has been running around 2.6% in 2007.[3]. Meanwhile, the U.S. dollar lost roughly 7% of its value relative to the yuan in 2007.[4] Can someone explain that little paradox? 70.15.114.2 (talk) 00:42, 5 February 2008 (UTC)

The answer is Balassa-Samuelson effect. I think we should somehow mention this effect in the article. --Doopdoop (talk) 19:42, 8 February 2008 (UTC)
Hmmm. Thanks for the explanation, but clue me in whether I'm interpreting it correctly. You're suggesting that the Chinese inflation rate represents a rapidly increasing price of some non-tradeable commodity over there - land, cheeseburgers, something. But the U.S. inflation rate coupled with free trade with the yuan means that Chinese tradeable goods have actually gotten 7%-2.6% = 4.4% cheaper - or more likely, the Chinese tradeable goods stayed the same price but the cost of land and rent-based commodities in the U.S. went down to compensate for overall increasing commodity prices. Obviously this suggests some ideas that need to be researched... some with rather ugly implications for the U.S. 70.15.114.2 (talk) 02:44, 11 February 2008 (UTC)
It is more like this - in the long term (sometimes very long) and very approximately Chinese inflation = US inflation - yuan appreciation + additional Chinese inflation in non-tradable sector. Prices of Chinese tradable goods in dollar terms have increased by approx. 2,6%, in yuans they decreased by 7 - 2.6 = 4.4% (which might be a problem for Chinese exporters), and prices of Chinese non-tradable goods have increased by let's say fifteen percent (so Chinese inflation rate 4.8 is weighted average of +15% and -4.4%). So there are no ugly implications for the US. --Doopdoop (talk) 19:15, 11 February 2008 (UTC)
By the way, as Balassa-Samuelson suggests, The Economist recently reported very high wage inflation in China, which would be consistent with high inflation in Chinese nontradeables. --Rinconsoleao (talk) 11:11, 12 February 2008 (UTC)

Perhaps we should mention the flip side: exports from China holding down inflation in the importing countries. For example,

“Poor families in America spend a larger share of their income on goods whose prices are directly affected by trade – such as clothing and food – than wealthier families. . . . This trend [imports helping to control inflation] can partly be explained by China. Prices of consumer goods in US stores have fallen most heavily in sectors where the Chinese presence has increased most. In canned seafood or cotton shirts, for example, where China’s exports to the rest of the world have increased dramatically this decade, inflation has been negative. In sectors where there is no Chinese presence, inflation has been more than 20 per cent. Moreover, as China produces goods of relatively low quality, sectors that have a strong Chinese presence are disproportionately consumed by the poor.”
Broda, Christian, "China and Wal-Mart: the true champions of equality," Financial Times June 4, 2008, p. 11. DOR (HK) (talk) 05:41, 4 June 2008 (UTC)

[edit] Capital Goods Price Index

A simple Google of the term came up under New Zealand Government Statistics. So I don't know if saying that "although so far no attempt at building such an index has been tried" is true or not. Leigao84 (talk) 22:31, 15 February 2008 (UTC)

It might have never been done in the US, but they do attempt to track it else where. Leigao84 (talk) 22:32, 15 February 2008 (UTC)

[edit] Auto-archiving

I have established an auto-archiver here (being bold and all), set to archive older than 130days. This can be adjusted if needed.--Gregalton (talk) 13:36, 25 February 2008 (UTC)

[edit] non-core inflation

I came to wikipedia looking for detailed information on non-core inflation. However, I only found a sentence talking about core inflation; which is inflation number excluding food and oil. I was hoping to figure out how to find US non-core inflation number, because that seems to be the "real" inflation number. Can anyone add that information in? Better yet, can anyone write out how to find the non-core CPI from Consumer Price Indexes of Bureau of Labor Statistics? I know CPI of BLS doesn't list that non-core inflation number straight out, so what calculation do I have to do to find the number? If that is too detailed, can someone make a new topic "Non-core Inflation" and explain it?

Thanks. —Preceding unsigned comment added by 60.250.111.7 (talk) 02:54, 7 March 2008 (UTC)

I apologise for being uncivil.

Nicolaas Smith (talk) 04:21, 19 March 2008 (UTC)

—Preceding unsigned comment added by 213.63.46.99 (talk) 12:45, 7 March 2008 (UTC)
Try the BLS web-site which provides CPI both core and total; they provide break-outs of the components that are excluded from core inflation separately (energy and food primarily). Essentially, inflation of the elements excluded are what you mean by non-core.--Gregalton (talk) 15:15, 7 March 2008 (UTC)
See also core inflation.--Gregalton (talk) 16:02, 7 March 2008 (UTC)

[edit] does not compute

Can someone explain inflation in this article in terms that real people can relate to? The typical academic treatment, as in the current version of the article, citing the standard macroeconomics texts, does not work. Saying that economists A, B, and C believe inflation is caused by abstract concepts X, Y, and Z doesn't cut it. Rather, it has the be explained in terms that people are familiar with for inclusion in an encyclopedia. Non-academic, non-abstract. Rtdrury (talk) 07:04, 14 March 2008 (UTC)

I apologise for being uncivil.Nicolaas Smith (talk) 04:20, 19 March 2008 (UTC)

Nicolaas Smith (talk) 21:12, 16 March 2008 (UTC)

  • Come on man, links again: where did I call it vandalism? - RHaworth (Talk | contribs) 22:02, 16 March 2008 (UTC)
I apologise for being uncivil.Nicolaas Smith (talk) 04:20, 19 March 2008 (UTC)

Nicolaas Smith (talk) 22:19, 16 March 2008 (UTC)the sockpuppet

I apologise for being uncivil.Nicolaas Smith (talk) 04:15, 19 March 2008 (UTC)

Nicolaas Smith (talk) 22:10, 16 March 2008 (UTC)

You can't find a reliable source(s) that says all of this?? - in a nonWP:SYNTHESIS way? Or finness current language of article just a tad to make it more understandable for people who haven't taken 5-6 college econ classes and read a lot on monetary theory. While still remaining true to sources. However, this is non economics 101. I've only read 1st half but it was better than expected. Haven't gotten far enough to see if it includes opinions that private banks in a free market more trustworthy than special interest controlled govt banks in creating enough money to facilitate trade without creating inflation (or money-based deflation) - assuming honest and competent people - and not crooks and fools - control most private banks. ;-) Carol Moore 15:19, 16 March 2008 (UTC)Carolmooredc {talk}
I apologise for being uncivil.Nicolaas Smith (talk) 04:12, 19 March 2008 (UTC)

Gregalton here. I will not refer to your past sockpuppetry as long as you log in when making contributions and use the same login consistently. I will do so if you contribute under other names or not logged in. I am also asking you to please stop referring to me directly in your edits or edit summaries unless there is a specific reason to do so.--Gregalton (talk) 19:13, 16 March 2008 (UTC)

I apologise for being uncivil.Nicolaas Smith (talk) 04:08, 19 March 2008 (UTC)

It is a simple request to cease and desist. You can choose whether or not you wish to agree to a polite request.--Gregalton (talk) 19:25, 16 March 2008 (UTC)

I apologise for being uncivil.Nicolaas Smith (talk) 04:08, 19 March 2008 (UTC)

Again, I am asking you politely to stop. If you wish to continue, that is of course up to you. I have stated clearly the reasons I've referred to your past sockpuppetry, and under what circumstances I will and will not do so.--Gregalton (talk) 19:42, 16 March 2008 (UTC) Retrieved from "http://en.wikipedia.org/wiki/User_talk:Nicolaas_Smith"

I apologise for being uncivil.Nicolaas Smith (talk) 04:08, 19 March 2008 (UTC) Nicolaas Smith (talk) 19:49, 16 March 2008 (UTC)
The way to contact administrators if you wish to complain about my behaviour is at administrators' noticeboard of incidents. However, what you have said above makes no sense - I have not attempted to ban you. I have said that when you make contributions under different names or not logged in, I may choose to note that you have used sockpuppets in the past for various reasons. Please do go ahead and file a complaint or notice if you wish. More information about how to contribute to wikipedia is at wp:help.
Please also stop comparing me to Robert Mugabe. Personal attacks are considered unacceptable behaviour.--Gregalton (talk) 06:53, 17 March 2008 (UTC)
 :I apologise for being uncivil.Nicolaas Smith (talk) 04:08, 19 March 2008 (UTC)—Preceding unsigned comment added by 87.103.77.114 (talk) 07:18, 17 March 2008 (UTC)

[edit] plain english

Nicolaas, thanks for pointing me to your plain english discussion on inflation. I haven't absorbed all of it yet but it certainly is similar to what I had in mind and certainly helps. I think there should be a place for "plain english" in an encyclopedia article on inflation though I can't say how, but maybe in its own section, near or at the top. Of course there has to be a concensus of some sort but those advocating the more conventional academic format might want to consider that it typically goes over the head of a great majority of people. Your plain english discussion probably needs to be "objectified" to avoid offending people with "lazy" labels and such. Thanks again. Rtdrury (talk) 22:44, 16 March 2008 (UTC)

I apologise for being uncivil. Nicolaas Smith (talk) 04:00, 19 March 2008 (UTC)
I may have been off-line when you posted this. As for most of the points above, I stick to what I've said before and ask for some politeness. I have not raised your sockpuppetry here again: you have. I would also appreciate if comparisons of me to dictators and their cronies stopped. And please stop referring to me repeatedly when I have not been involved in discussions directly.
As for your COS, the situation has evidently changed now that your work has actually been published - congratulations. I did not refer to this before because it had not actually been published. It would also be helpful if you read other parts of the instructions for using WP as I have suggested before. And please stop using inflammatory words like "reprehensible."--Gregalton (talk) 14:45, 18 March 2008 (UTC)
Recognize that even if you've been published in the most WP:RS, editors still might have a problem with putting any of or more than a couple sentences of your material in the article, for any number of reasons. So it would be helpful to observe WP:CIV in those cases. Carol Moore 16:22, 18 March 2008 (UTC)Carolmooredc {talk}
Thank you Carol. Fortunately your well phrased sentence leaves no space for observing anything.

Nicolaas Smith (talk) 09:53, 21 March 2008 (UTC)

I apologise for being uncivil.Nicolaas Smith (talk) 03:59, 19 March 2008 (UTC)

[edit] Measures of inflation

RPI is not an old name for CPI in the UK. They are still used as seperate methods to find inflation. However, I don't know enough about either one to edit it myself. I also am quite new and don't know how to edit it fully either. Plukerpluck (talk) 09:48, 16 April 2008 (UTC)

Pluckerpluck: Add what you want to say about RPI and CPI and add a link to a reference in a book or article or on the internet - it must be a reputable source. You just click on edit in that section and add your contribution with the reference. That´s it. If you have a good reference no-one can just take it off.

Nicolaas Smith (talk) 17:08, 16 April 2008 (UTC)

[edit] Inflation or inflation rate

The common economic definition of inflation is a change in price over time (as given here). This means that "inflation rate" is the change of inflation over time. It is one thing for politicians to use loose terminology like this, but an encyclopedia should be more careful with it's terminology. I propose that everywhere that "inflation rate" appears, it should simply read "inflation" Timdownie (talk) 10:11, 27 April 2008 (UTC)


[edit] Inflation has two components

Inflation is the destruction of value in monetary and constant items over time. Inflation has two components: a monetary component: cash inflation and a non-monetary component: Historical Cost Accounting inflation.

For the latest up-to-date facts about inflation visit [5]

See also this peer reviewed article in South Africa´s leading accountancy journal: [6]

Nicolaas Smith (talk) 22:57, 27 April 2008 (UTC)


[edit] Need to Discuss the Political Motivations Involved

Inflation/Deflation, as the article states, was defined in classical economics as changes in the money supply.

The human population growth rate is about 2%, as is the average increase in the amount of gold/silver from mining. It might be more accurate to say that inflation is an increase in the money supply that exceeds the rate of population growth. As the "economy" is the aggregate of goods, services and labor, the economy (goods and services) can only grow if the population is growing.

Since the United States and other Western nations have laws that pay entitlements to a large percentage of their population that are adjusted by a price index, there is a direct incentive for governments to re-define the price indices and under-report inflation in order to minimize the amount of money they pay out in entitlements. For example, the U.S. government changed the Consumer Price Index in the past decade to minimize the weight of energy and food - which are usually the first sectors to show the effects of inflationary monetary policy.

In a growing economy with a stable money supply, the price of goods and services should be falling slightly because the amount of goods and services relative to the total money supply is increasing. For example, the prices of consumer electronics and computers have fallen steadily for the past twenty years, but no economist has argued that we are in a "deflation". Therefore, it is putting the cart before the horse to define "inflation" as "price increase" and deflation as "price decrease". Rather it is the money supply that these terms describe, and price changes are the effect of inflation or deflation.

The politicization of the Consumer Price Index and other national indices deserves some treatment in this article.Cadwallader (talk) 20:55, 29 April 2008 (UTC)

[edit] Definition of inflation

It is very clear that the definition of inflation is not: Inflation is a rise in the general level of prices over time. That is an effect of monetary inflation. If that is the definition, then what are the effects of inflation? What are the effects of a rise in the general level of prices?

Nicolaas Smith (talk) 15:36, 1 May 2008 (UTC)

I agree, the increase of the money supply is a much better definition, if for no other reason then the following. Defining inflation as an increase in price reflexively defines increase in price as inflation. This is not true, prices increase for many reasons that have nothing to do with inflation (the money supply.) The way the article currently defines inflation is wrong and adds confusion to an already much misunderstood topic. I support changing it.Byates5637 (talk) 14:25, 4 May 2008 (UTC)

I support changing it too. Milton Friedman´s statement that inflation is always and everywhere a monetary phenomenon is never disputed. Inflation has to do with money. A definition of inflation in terms of money seems logical.

I suggest: Inflation is the destruction of value in money.

Nicolaas Smith (talk) 16:04, 4 May 2008 (UTC)

I forgot that I need a reliable third party reference :)

Nicolaas Smith (talk) 16:10, 4 May 2008 (UTC)

Here are some further facts about inflation:

Inflation is always and everywhere the destruction of value in money. This destruction is transferred to constant real value non-monetary items never or not fully updated by the application of the stable measuring unit assumption under the Historical Cost Accounting model since money is the universal unit of account. Monetary inflation is an economic process resulting in the destruction of the real value of monetary items over time leading to an increase in the general level of prices. Historical Cost Accounting inflation is the Historical Cost Accounting practice of never or not fully updating constant real value non-monetary items resulting in their destruction at the rate of inflation when they are never updated or at a lower rate when they are only partly updated over time.

Reference to a peer reviewed article in a reliable third party publication: [7]I am citing myself in terms of Wikipedia policy.

Nicolaas Smith (talk) 18:10, 4 May 2008 (UTC)

Actually, no, the common definition is a rise in the general price level. Please see [8]. "Inflation is an increase in the price of a basket of goods and services that is representative of the economy as a whole." There is a separate article on monetary inflation.
Yes, the definition of inflation is a definition of the effect (or the measurement of the effect), and is distinct from the causes of inflation. The increase in the money supply is the cause (some may say one of the causes). The basic money equation includes velocity, which is distinct from the supply of money, so to say monetary inflation is the same as inflation is wrong (unless one assumes velocity never changes).--Gregalton (talk) 16:03, 1 May 2008 (UTC)

Apparently it is what Monetarists assume:

"As Monetarists assume that V and T are fixed, there is a direct relationship between the growth of the money supply and inflation." See monetary inflation - Paragraph 4.

Nicolaas Smith (talk) 20:09, 1 May 2008 (UTC)

Yes, it is sometimes assumed, by monetarists and others. Sometimes that is a reasonable assumption for ease of calculation or analysis (i.e. a shortcut), and also because velocity cannot be directly observed. But that does not make it a correct assumption or change the definitional issue. Cause and effect remain distinct.--Gregalton (talk) 03:10, 2 May 2008 (UTC)


[edit] Market Basket

The article links to Market Basket. The article in question is entirely inappropriate. I suggest the construction of a proper article on the economical type of basket, and if need be that a disambiguation is made. Say, Market Basket (economics) and Market Basket (company). Scaller (talk) 09:21, 9 May 2008 (UTC)