Talk:Inflation/Archive 4

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Archive 2

Archive 3

Archive 4

Wage inflation?

Inflation is suppose to be both in wages and in price, hurting private savings, and that's about it.98.165.15.98 (talk) 04:28, 16 March 2010 (UTC)

Debt relief (Dubious)

(Entire topic) I think this is a little misleading, Inflation takes time. On a 10 year or 30 year loan I can see the (R=n-i) math working in one's favor but for short-term debts this is entirely irrelevant as the price of bread, rent, or fuel won't change enough to make any more of a difference than a few pennies unless something drastic occurs (War, Depression/Recession). I motion for a tag line describing this caveat. There is no wealth like knowledge, no poverty like ignorance. - Ali ibn Abi-Talib (talk) 08:16, 17 March 2010 (UTC)

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Graphic is out of date, Argentina's inflation nowadays is between 5% and 10% (source: INDEC, national institute for statistics and census).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. (In 2010 INDEC data are discussed in Argentina, because it may have been manipulated by a factor of four.)

On the Origin and Evolution of the Word Inflation

In economics, inflation has a traditional meaning and a new popular meaning. Traditionally, inflation has meant monetary inflation an increase in the general quantity of money in an economy over a period of time with the consequence of generally rising prices. Recently the consequence has been taken for the cause, and inflation has begun to signify price inflation or a general rise in prices which causes each monetary unit to be able to buy fewer goods and services.

Copy of edit made previously by Chrisnoscrub047. I think this may be added under history.

PennySeven (talk) 11:45, 3 February 2010 (UTC)

This is a valuable addition to the article made by Chrisnoscrub047 and should not just be rubbished by the local inflation rubbisher Lawrencenkhoo. PennySeven (talk) 12:38, 3 February 2010 (UTC)

Agreed. Lawrencekhoo, if the issue of completely ignoring the evolution of the very word that IS the ENTIRE subject of this encyclopedia article has been "long settled" please show us where this occurred. I see absolutely no discussion of this. --JohnDoe0007 (talk) 04:12, 12 April 2010 (UTC)

P7 is a banned user. Look in the Archives for discussion. Alternately find one University text or reference that gives this issue weight. LK (talk) 09:55, 12 April 2010 (UTC)

I'm not exactly sure why PennySeven being a banned user is relevant. Regardless, I looked through the archives, and while I saw a lot of back and forth about what the definition really is, and how the page should be named, I saw no "consensus" on completely removing any mention of the history of the word and how it has changed. My edit to the intro did not do anything to alter the definition. I see no reason why any mention of the fact that the implied meaning of the word has evolved over time should be completely omitted from the introduction. This does absolutely nothing to improve the article and if anything, harms it. Explain why the cited Federal Reserve text—specifically documenting the fact how the word has referred to different things—is not important to the reader's understanding of the subject of the article. --JohnDoe0007 (talk) 10:46, 12 April 2010 (UTC)

The historical use of the term is described in the very first section following the lead, hardly hiding it. The consensus arrived at was that there should not be undue weight for the Austrian viewpoint in the article, and that the lead should summarize the issues raised in the body of the article according to appropriate weight. Hence, there should not be a disproportionate discussion of the historical etymology of the use of the word inflation in the lead. If you disbelieve my description of consensus on this issue, you can raise this issue at the Econ Wikiproject talk page. LK (talk) 11:42, 12 April 2010 (UTC)

PennySeven blocked indefinitely

A note to everyone else who edits this article - PennySeven has been indefinitely blocked for persistent disruptive editing. If he/she attempts to evade this block with socks, please let an admin know. Thanks! Tan | 39 23:05, 7 March 2010 (UTC)

I've semi-protected the article and this talk page for now. — Satori Son 14:39, 28 June 2010 (UTC)

Tobin Effect

The Nobel prize winning economist James Tobin at one point had argued that a moderate level of inflation can increase investment in an economy leading to faster growth or at least higher steady state level of income. This is due to the fact that inflation lowers the return on monetary assets relative to real assets, such as physical capital. To avoid inflation, investors would switch from holding their assets as money (or a similar, susceptible to inflation, form) to investing in real capital projects. See Tobin monetary model[30][Unclear: See Discussion]

The summary uses too many technical terms without explaining them for people who do not understand economics. Example: "What is the difference between 'monetary assets' and 'real assets'?" This is Wikipedia, the link-web-whore of the net. Where's the links that explain what physical capital is, real assets, or any links to explain what these very uncommon-to-normal-vocabulary-terms mean?There is no wealth like knowledge, no poverty like ignorance. - Ali ibn Abi-Talib (talk) 08:30, 17 March 2010 (UTC)

"Austrian School"

Is it really necessary to even have a blurb on this, especially since it's so misleading?

It starts out with "The Austrian School asserts that inflation is an increase in the money supply, rising prices are merely consequences and this semantic difference is important in defining inflation." This assertion is highly absurd and contradicts the bulk of the article. Looking at the equation MV = PY (money supply * money velocity = price level * GDP), inflation is when P increases, not when M increases.

I understand that the article uses the qualifier "The Austrian School asserts," but there are two important points here: 1) this view is starkly in contrast with what people actually define inflation as, such that its mention may confuse the reader, and 2) should we give any significant amount of attention to a viewpoint that not only has no acceptance in the professional world, but has virtually no influence outside of fringe political cliques on the Internet? I see that the articles on evolution and natural selection do not give nearly as much credence to professionally unaccepted views as this article does. --Dwarnr (talk) 03:21, 23 May 2010 (UTC)

Are comments like these even necessary? The Austrian School is the oldest continual school of economic thought and the only school who holds true to the original definition of inflation. As for not being accepted in the professional world, that is to the Austrians' credit. All the so called "professionals" were either completely blindsided by the last bubble (like they've been in the past as well) or called for the housing bubble to inflated. Austrian economists were by and large the only ones who 1) saw it coming 2) told people why it was coming and 3) are still the only ones who can give a logic, coherent and comprehensible explanation to why it came. People like Peter Schiff and Ron Paul have popularized the Austrian School in recent years, along with best selling authors like Thomas Woods.

And what is absurd with claiming that increases in money supply leads to higher prices? If there is one thing that has been proven by history, that it is, not to mention that rising prices is a natural, logical and unavoidable consequence of inflation. If you'd just leave your ridiculous formulas to the scrapheap of history where they belong you'd see that. Further, it is important to separate inflation from rising prices. Inflation has a lot more dire effects than just rise in prices, in addition to the fact that prices rise very differently depending on what commodity, asset or service you look at. The Austrian School is the only school who understands that you can't look at aggregates, you have to look at individual sectors. It was focusing on aggregates that made the great Keynesian Paul Samuelson claim as late as 1989 that the USSR would overtake the US. The second and most obvious point is that prices can rise for various reasons, inflation being merely one of them.

The only confusion this article creates are found in the mindboggling logical fallacies found in the bulk of the text, mainly in the Keynesian excerpt. I can't believe that even after the biggest bubble in history of the world, people still cling witch doctors like Krugman, Mankiw, Stiglitz, Bernanke and Galbraith. No matter they've been proven wrong in everything they've ever said. No matter the Austrians have been proven right in everything they've ever said. No matter that these two claims are aptly documented and easily demonstrable.

The so called "Austrian view" is the only view that should be displayed here on Wikipedia. It is the theory of evolution to your creationism and intelligent design. Misessus (talk) 19:10, 14 August 2010 (UTC)

I'll try to set aside Poe's Law and answer this seriously. What specific text in the article is wrong, and what would you replace it with? It would be helpful if you could support each replacement with cites from reliable sources (or, at least, sources more reliable than witch doctors like Krugman, Mankiw, Stiglitz, Bernanke and Galbraith :-)

bobrayner (talk) 19:42, 14 August 2010 (UTC)

Unfortunately, Misessus is totally serious about this, and is merely reflecting the party line over at the Von Mises Institute. But since we write articles based on verifiability not truth, the world will have to remain ignorant to the fact that they are mistaken about the 'true meaning' of certain words. LK (talk) 01:06, 15 August 2010 (UTC)

The main problem with the article is the sheer length of it. It gives the impression that inflation is some sort of mystical economic phenomenon that nobody really can explain. This is underscored by the many different "views" of inflation. In reality, inflation is nothing but the increase in supply of money. That is all that needs to be said about it. The word "inflation" was first used in the US in the 19th century, to describe advocates of printing money. They were called "inflationists". The phenomenon itself is, as history shows, very old indeed. Nicolas Oresme wrote about it as early as the 14th century, and Juan de Mariana wrote a treatise on it in the beginning of the 17th century. The mystification of inflation, which was no mystery at all for at least 700 years has served no other purpose than to disguise this third way of funding government spending. It was part of the scientific revolution in the field of economics, prompted by neoclassicists and keynesians to make economics more like the natural sciences. It was then the various formulas started to appear, along with mathematical modeling, as well as other misguided concepts such as perfect competition and so on.

This article would be much more informative if it did nothing else than to state the obvious and documented truth, i.e. that inflation is the increase in the supply of money. The CONSEQUENCES, on the other hand, deserve a section of its own, describing what different schools claim to be the consequences of inflation. That would make sense, because various schools propose different things.

On a final note, I think it is symptomatic for the economics pages on Wikipedia that they are not concerned with truth, only to reflect the popular opinion. I should like to remind Lawerencekhoo and everyone else that science is not a matter of opinion, it is a matter of fact. That goes for economics as well. This article would serve the public much better if we removed everything save the simple and documented, original definition of inflation, and then listed what the various schools claim to be consequences of inflation. That would remove all contradictions as far as the meaning of the word goes, and display the differences of opinion of what inflation causes. Then the reader can make up his own mind about what he thinks sounds reasonable. What could be better than that?

I'm quite frankly appalled by the constant hostility of several Wiki editors against the documented truth about economics. It does tremendous damage to the credibility of Wikipedia.

Misessus (talk) 07:57, 15 August 2010 (UTC)

At a minimum, it was given weight that seems to exceed its academic prominence. I've endeavored to correct that issue. BigK HeX (talk) 08:35, 15 August 2010 (UTC)

And how exactly are you qualified or competent to make that judgement? The section stays. Ron Paul is by leaps and bounds the most prominent member of Congress when it comes to economics and monetary theory, and is a well known advocate of the Austrian School. In addition, Austrian economists and historians produce best selling books year after year, and work as professors in numerous prestigious universities in both Europe and the US. Stop the witch hunt. There is no basis for it, and I won't allow it.

Misessus (talk) 11:28, 15 August 2010 (UTC)

Here's an idea. Stop ranting with that talk of Ron Paul, and actually prove me wrong. You are the editor supporting inclusion so it will be YOU who proves that allotting so much text meets WP:NPOV (specifically, WP:DUE). BigK HeX (talk) 17:58, 15 August 2010 (UTC)

It's been a while since I've edited this article (probably a year), and I agreed that the Austrian School was given too much weight in the article (and Wikipedia overall) and helped to reduce the content to a reasonable level. I usually stay out of this article as things are usually under control by LK and a few others, but it appears now that it has shifted too much in the other direction. A single sentence for the Austrian section, even in summary style, is absurd. BigK Hex's edits on Aug15 are a violation of NPOV and against long standing article consensus. I'm restoring that section to the version before BigK Hex and Misessus touched it (August 10th). Stop edit waring or you'll be blocked. Please discuss further edits on the talk before changing. Morphh ^(talk) 18:48, 15 August 2010 (UTC)

Personally, I think a single sentence is being generous. I'd like to see evidence that it deserves any mention. If you have some, then please post. BigK HeX (talk) 18:51, 15 August 2010 (UTC)

I'm sorry, but you're removing long standing content of sourced material. In such cases, it is you that must "prove it" otherwise. Keep in mind that, in determining proper weight, we consider a viewpoint's prevalence in reliable sources, not its prevalence among Wikipedia editors or the general public. We've already had this discussion in depth at WikiProject Economics for some years now. They do have sufficient coverage in reliable sources to present their POV. In many cases on Wikipedia (though this has been reduced), their view has had too much weight, but a few paragraphs seems appropriate for this article since it's something they write about often. We must present a point of view with a level of content that adequately presents the point of view. The material is source, adequately presents the point of view with a reasonable amount of content (few paragraphs). I have no issue with attempting to correct content if it was incorrect, as Misessus was suggesting, but I do have a huge issue with deleting mass content that has had long standing. Morphh ^(talk) 19:05, 15 August 2010 (UTC)

I'll note that -- technically -- the burden of proof for adding text into an article lies with the editor wishing to include the text. I've seen a fair number of bytes devoted to discussing this issue, but I still don't see any editors providing us with evidence that the view deserves as much prominence as monetarism or the most of the other views discussed in the Wiki article which seem to be given as much weight as the Austrian stuff.

I certainly don't care about the prominence among Wikipedians, but I do want to see a bit of evidence regarding reliable sources on Austrian Inflation, given that: "in determining proper weight, we consider a viewpoint's prevalence in reliable sources". I don't think this particlular matter is all that significant, but I am still curious to see supporting editors show that this included material is WP:DUE. BigK HeX (talk) 19:20, 15 August 2010 (UTC)

You're reading WP:V. We're not adding new unsourced text here for which that rule applies. I'm restoring a long standing consensus of sourced text, which is not the same thing. LK and I (among others, removed a great deal of Austrian text already). As for proof, there are plenty of reliable sources that show this view represents a minority view and their is certainly enough to merit three paragraphs of that viewpoint here. This section is a summary style and should have enough content to minimally summarize that section and adequately present the POV, which I think the prior content did. Maybe we could trim it to two paragraphs, but one sentence is not acceptable. The Keynesian view has 11 paragraphs and the Monetarist view has four with additional math and information and another article (maybe it should have more). So two-three paragraphs of a summary style for this viewpoint is not unreasonable. Morphh ^(talk) 19:55, 15 August 2010 (UTC)

Alrighty. Fair enough. Trimming it down a tad more, and expanding the Friedman's stuff might give it the balance I would have expected to be more representative of the prominence. BigK HeX (talk) 20:03, 15 August 2010 (UTC)

I trimmed it down and cleaned it up a bit. Morphh ^(talk) 20:49, 15 August 2010 (UTC)

I think Morph has done good work here, and I'ld like to thank him for his good sense and attention to detail. LK (talk) 07:16, 16 August 2010 (UTC)

BigK HeX, if you'd actually read what has been said, you'd know that I had offered several arguments already. You can't just ignore what people say and then claim they never said anything.

The Austrian view is represented in many prestigious universites in the world, both in the US and Europe. People like Thomas DiLorenzo, Walter Block, Bill Barnett, Guido Hülsmann, Walter Williams, Thomas Sowell and several work at universities, some even heading the economics department.

The Austrian view has also been represented in the mainstream media for years, mainly thanks to Peter Schiff and Jim Rogers, who have been constant features on various financial shows.

Austrian historians and economists have continuously produced best selling books, and continue to do so to this day.

The Mises Institute website is the world's largets web portal for economics and political philosophy, with well over a million views per month.

In politics, the Austrian view is being advocated by the most prominent and prolific politician of our day when it comes to economic and monetary policy, Ron Paul, also a best selling author. Thomas Woods has testified before the House of Representatives.

To call the Austrian School a fringe movement and that it shouldn't even be mentioned on Wikipedia borders on hysterical and flies in the face of the very rules you and others so frequently refer to. As it stands now, the Real Bills Doctrine section is the same size as the Austrian section. If you were actually concerned about the balance of the article, you would have called for the abolition of the whole RBD-section. But no, you've only called for the abolition fo the AS-section, which prooves that your arguments has nothing to do with balance or Wiki-rules, it is completely personal. —Preceding unsigned comment added by Misessus (talk • contribs) 06:02, 17 August 2010 (UTC)

I don't see any consenus against the addition I did. I will revert your deletion and submit it to discussion. The reason for the addition, which in itself was very minor, was to explain one of the key reasons why Austrians make this distinction. This is material information and fits well in the summary.

Misessus (talk) 12:50, 17 August 2010 (UTC)

Restoring collaborative version of text

We have at least three editors here agreeing to a reduced version of text on the "Austrian view". Then, mere hours later, Misessus (in seeming disregard of the consensus newly reached) expands the text yet again. I, personally, do not find the topic to be worthy of the weight accorded, with Misessus failing to provide evidence of attention that the theory has received from the wider academic community, making it a small minority viewpoint at best (or -- more likely -- a tiny minority viewpoint, which would explain its absence in the Inflation articles of other encyclopedias). Is there support for the expanded text or should it be reduced, per the previous decision of editors? BigK HeX (talk) 15:58, 17 August 2010 (UTC)

The addition I made was three sentences. It did not expand the section in any significant way, but was very relevant considering the nature of the article.

BigK HeX, I've provided you with ample evidence for why the Austrian view merits a separate section. Your constant denial of this just childish, and indicates that you like so many other people seem to have an inexplicable, personal animosity towards the Austrian School. It is clearly far more prominent than the Real Bills Doctrine, yet you have seem to have no problem with the attention this obscure peculiarity has been given. In fact, nobody seems to have a problem with that, the only problem is with the Austrian School. But here is the evidence, for the fourth time now I believe:

1. The Austrian view is represented in many prestigious universites in the world, both in the US and Europe. People like Thomas DiLorenzo, Walter Block, Bill Barnett, Guido Hülsmann, Walter Williams, Thomas Sowell and several work at universities, some even heading the economics department.

2. The Austrian view has also been represented in the mainstream media for years, mainly thanks to Peter Schiff and Jim Rogers, who have been constant features on various financial shows.

3. Austrian historians and economists have continuously produced best selling books, and continue to do so to this day.

4.The Mises Institute website is the world's largets web portal for economics and political philosophy, with well over a million views per month.

5. In politics, the Austrian view is being advocated by the most prominent and prolific politician of our day when it comes to economic and monetary policy, Ron Paul, also a best selling author. Thomas Woods has testified before the House of Representatives.

You can keep lying about me not having provided evidence if you want, it only proves I am right about you and your buddies. If you want to discuss the merits of the Austrian School, you have to discuss the merits of the Real Bill Doctrine section first.

Misessus (talk) 18:50, 17 August 2010 (UTC)

You fail still to "provide evidence of attention that the theory has received from the wider academic community". Your repetition of the claim that amounts to little more than "Austrians discuss the Austrian theory" is useless in describing the wider academic community ... obviously. BigK HeX (talk) 19:11, 17 August 2010 (UTC)

An what such evidence have you provided in support of the Real Bills Doctrine? What does the wider academic community even mean? Austrians frequently debate mainstream economists. Thomas DiLorenzo and Thomas Woods have been in the mainstream hot seat for years. Murray Rothbard's book on the panic of 1819 is widely acknowledged as the best book on the subject. Many mainstream economist are finally coming to the realization that Hoover's and FDR's New Deal policies actually made the Great Depression worse, something Austrians have always claimed to be the case. The current economic crisis has visibly raised the public interest in the Austrian Business Cycle Theory, evidenced by the fact that Ron Paul's Audit the Fed bill got over 300 co-sponsors.

Your constant denial of well documented facts is just childish. And again, and try to actually understand this now, before there is any discussion about the Austrian section, you first have to produce evidence for the Real Bills Doctrine having received "attention from the wider academic community". Why don't you have any problems with that section being there? I would also like to remind you that you don't possess the right to judge what is evidence for some undefined criterium and what isn't. You have repeated the claim of lacking evidence with the persistency and intelligence of a parrot. Now you show me the reason why Real Bills Doctrine deserves a section of its own, but not the Austrian School. I'm tired of your inane bullying and won't have any more of it. Misessus (talk) 23:49, 17 August 2010 (UTC)

Re: "What does the wider academic community even mean?

It means exactly the same thing that is meant by WP:RS, which doesn't seem too difficult for most editors, but maybe you're an exception. Since you keep making reference to Austrian publications, you should note that WP:RS states: "Care should be taken with journals that exist mainly to promote a particular point of view. A claim of peer review is not an indication that the journal is respected, or that any meaningful peer review occurs. Journals that are not peer reviewed by the wider academic community should not be considered reliable, except to show the views of the groups represented by those journals."

You've typed a lot of words about what AUSTRIANS are saying ("Tom Woods has a bestseller", "DiLorenzo is a professor!") .... which is strange since I've asked you about how the majority views Austrian Inflation. I find it fairly baffling that you repeatedly fail to understand that your useless "factoids" about Tom Woods, Ron Paul, et al. are exactly ZERO evidence that there is any significant regard for this viewpoint outside of the tiny Austrian clique.

Additionally, that you keep babbling about your little Real Bills Doctrine red herring is similarly off-topic. My current concern is the Austrian School WP:UNDUE weight. If you choose to tackle the Real Bills material at this time, then go for it, but that obviously has precious little relevance to justifying any violations of WP:NPOV caused by excessive Austrian school text. BigK HeX (talk) 07:59, 18 August 2010 (UTC)

You persist in your childish ways. Well, that was to be expected. My point was that your concept of wider academic acceptance was very selective. To this day, you've not been able to produce one single argument for your point, you always come back to your childish ad hominem and hysterical claims. No one has claimed that the Austrian view is presently the majority view, but it is quite obviously a significant minority view, which is why it has its own, albeit very tiny section. I have proven that it is a significant minority view with the facts I've listed, something you fail to understand. Maybe you should read and think a little more instead of trying to find as many Wiki-guidelines to refer to as possible. We are all aware of them, your constant referral to them is meaningless and a poor disguise for your lack of real arguments.

The fact you that you don't understand the relevance of the Real Bills Doctrine just goes to show how unqualified you are as an editor, no matter how many times you refer to official Wiki-guide lines. The Austrian School is clearly much more significant than many other schools represented in this article. If your concern were with balance and undue weight, you would have to address all those other schools and demand their deletion as well, but you don't. You only want to censor the Austrian school.

The question is whether any specific views should be presented at all, or if the whole article should only echo the Keynesian view, in which case even the monetarist section should be deleted and there would not be a specific mention that this article represents the keynesian view. But you don't understand any of this, you're so hell bent on deleting a specific school you for whatever reason don't like. You're so blinded by your bias that you don't even understand what the discussion is really about or what the implications of your own demands are. Either you cut EVERYTHING except the keynesian text, or you leave the article as it stands today. Or you can just admit you don't care about how the article looks, just as long every mention of the Austrian School is deleted. Misessus (talk) 04:23, 19 August 2010 (UTC)

You stuff an awful lot of red herrings and Two Wrongs fallacies into your long-winded screeds. This discussion is about the weight of the Austrian School text -- not whether "everything except 'Keynesianism' should be stripped from the article", not the Real Bills Doctrine yet, and not for your silly little characterizations of my "childish" behavior. If I wanted to "censor" the Austrian School, I would have deleted the entire section. Rather obviously, my disinclination to delete the Austrian school text outright shows consorship isn't my goal, but you seem unable to see past your POV and vitriol to see even the obvious. You can continue to praise Austrians for receiving some attention, in general, but this discussion is about specifics. And since you've failed to provide even a single source that provides indication that -- specifically -- the Austrian theory of inflation is a significant viewpoint among reliable sources on inflation, I will give the text a weight proportional to the reliable sources you've provided. If you decide to provide reliable sources (reviewed by the wider academic community), then I may have more to say. I'm guessing you'll throw out more ad hominems, unsourced generalities, and praise for Ron Paul instead of any substantive evidence about this specific topic. So, cheers! BigK HeX (talk) 07:39, 19 August 2010 (UTC)

Misessus, could the additional content your adding be placed in the Monetary Inflation or the section The Austrian view of inflation? If not, could you explain why this addition is important in our overview. For me, the addition seems more like additional information (expanded detail) for the viewpoint rather than a necessary part of a summary overview. The intent of the section is to give the reader a quick understanding of the view and direct them to the other articles for the details on that viewpoint. Morphh ^(talk) 14:10, 19 August 2010 (UTC)

Morph, the reason for making the addition was to describe the reason why Austrians adhere to the original meaning of the word. It illustrates the fundamental difference between Austrians and mainstream, i.e. that Austrians focus on individual sectors of the economy while mainstream economists focus on aggregates, like the general price level. This is perhaps the most significant difference between the two, and no other issue makes this difference so clear than inflation. I would dare claim that if nothing else is written about the Austrian school on this article, this is what the Austrian section should say.

Misessus, the 'Related definitions' and 'Measurement' sections of the article make perfectly clear that your argument here is mistaken. Mainstream economists, who use 'inflation' to mean 'a rise in the price level', often analyze a rise in prices overall, but they also frequently analyze price rises in narrower indices. So central bank analysts and other mainstream economists talk about 'CPI inflation', but they also talk about 'core inflation', 'commodity price inflation', 'housing price inflation', 'wage inflation', etc. Mainstream economists perfectly agree with Austrian economists that prices in some sectors of the economy react more quickly to changes in the money supply than those in other sectors. Therefore there is no justification for treating this as a uniquely Austrian point. In fact, the 'measurement' section already makes this point, since it specifically discusses to 'core inflation' as being a measure of price rises in those sectors where prices change more slowly. Rinconsoleao (talk) 11:21, 20 August 2010 (UTC)

When comparing the different views on inflation, the first and only really relevant question is why does it matter how various schools define this specific term. To many it may seem a pointless debate. My addition answers that question. That is why it should be there. And again, the addition was THREE SENTENCES, its not like the Austrian section suddenly became dominant. But if the consensus is that these three sentences was the straw that broke the camel's back, then I could read through the section again and suggest deletion of some other part of it. I'd rather it stayed the way it is of course, but if it is deemed necessary, I will find something to delete.

BigK, it was clear from the start that you had no intention of engaging in a meaningful discussion about this, you proved that by calling for the deletion of the entire section. I will leave you to your ranting and continue the discussion with those capable of rational debate. I nevertheless want to thank you for your passionate input and apologize for losing my temper here and there.

Misessus (talk) 20:20, 19 August 2010 (UTC)

Rincon, you are wrong. The mainstream definition refers to a rise in the -general- price level, which is why the CPI is the most common measure of inflation. The whole Keynesian theory is based on aggregates, this is why they always talk about stimulating aggregate demand and spending. This is also why Keynesians falsely believe that the US experienced massive economic growth during WWII, because that is what they conclude from looking at statistics, which show huge increases in aggregate spending. Consequently, Paul Samuelson as late as 1989 was convinced that the USSR would overtake the US, precisely because all he did was look at aggregate numbers, not the individual factors behind those numbers.

The same thing can be observed today. Ben Bernanke has on several occasions testified before Congress that there is no inflation in the US, because the overall price level has remained fairly stable, not mentioning the skyrocketing prices in health care and education. This has been echoed by several other prominent mainstreamers, such as Galbraith. Even if mainstream economists sometimes look at specific prices, it is undeniable that their focus is always on aggregates, whereas the Austrians' focus always is on individual sectors of the economy. This is why mainstream economists also always advocate actions to increase aggregate demand and aggregate spending, calling for monetary stimuli of various forms, be it then cash-for-clunkers, tax rebates for home buyers, spending on infrastructure and whatnot. Keynes said it best in his "General Theory", which was then echoed by Krugman, with his money in the mine example. He said that during a depression with low aggregate demand, the government should put cash in glass jars and bury them in abandoned mines and then implode the mines. Then, they should sell excavation rights to the public, letting them buy the right to dig up these jars of money, which they then can spend. This to increase aggregate demand and spending.

Nothing in the "Related definitions" section does anything to contradict my argument. I could write an entire article on this very subject. In addition, I would ask that you in the future insert your edits -below- the text you are responding to. When the talking page gets this long, there is a big risk of edits getting lost in all the other text if you don't put it last, which in turn is actually a rather funny analogy of the whole individuality vs. aggregate debate. At any rate, I am going on a two week trip to Scotland and I'm not sure if I'll have any internet access during that trip. Since no serious objections have been raised against the addition, I would ask that it is left standing and that the article is opened for edit again. Misessus (talk) 07:40, 22 August 2010 (UTC)

Opening paragraph is just plain wrong

Inflation is not a rise in prices. It's an increase in money supply over-and-above the demand for goods and services. Here's a pretty good definition: http://www.yourdictionary.com/dictionary-articles/definition-of-inflation.html --LanceHaverkamp 22:14, 15 August 2010 (UTC) —Preceding unsigned comment added by Lance W. Haverkamp (talk • contribs)

That is monetary inflation which is a separate, but real, phenomenon. It has its own article. This article is about price inflation, which is what almost every economist means when they say "inflation" except when they explicitly qualify it by saying "monetary inflation" or "inflation of the money supply".

The link you supply makes it clear that it is a personal view of Your Dictionary when they say "Here at YourDictionary, we define inflation...". Now, I have never heard of modern dictionaries having opinions before but clearly they couldn't resist a little bit of editorialising on this. Sadly they are not in agreement with mainstream economic usage. Our own, Wiktionary does a much better job of explaining all the different usages without favouring one over another:

--DanielRigal (talk) 22:54, 15 August 2010 (UTC)

If this article is about "price inflation", it should be called "Price Inflation", to do otherwise is both misleading and inaccurate. And that change wouldn't make the opening paragraph accurate. Price inflation is not a phenomenon (to borrow your very good term) unto itself, it's entirely a side-effect of what you are calling monetary inflation--it does not exist apart from monetary inflation. Given a hard currency, prices naturally fall (rather than rise) over time, as a result of manufacturing innovations and competition. If we have any desire to write about price inflation at all, it should be a sub heading under monetary inflation. --LanceHaverkamp 23:36, 15 August 2010 (UTC) —Preceding unsigned comment added by Lance W. Haverkamp (talk • contribs)

You have a right to hold your own opinions on these issues but when they diverge from mainstream thinking and language usage you can't simply expect articles to be modified to fit your personal views and nomenclature. We are well aware that there is a small group who zealously believe that there is only one "real" type of inflation and who want to simply ignore mainstream usage as "wrong". We have them turning up here quite regularly to argue the toss. We do have articles about their non-mainstream views and we are not trying to keep their views out of Wikipedia but we also have to maintain a sense of perspective. We have to cover mainstream views as our main concern in this article. As it stands the introduction is a correct introduction to what most economists mean when they say "inflation". --DanielRigal (talk) 23:48, 15 August 2010 (UTC)

Here's a thought experiment. If Wikipedia had existed in the time of Copernicus and then Galileo, would the entry for the earth had said it was flat and that the sun revolved around it? Would it have treated "zealous" supporters of Galileo and Copernicus as fringe crack pots and blocked them at every turn? Misessus (talk) 06:12, 17 August 2010 (UTC)

Here's a thought experiment. If Wikipedia had existed in the time of Armstrong and Kaysing, would the entry for the moon landings have said it was certainly possible that it was faked? Would it have treated "zealous" supporters of the Moon Landing Hoax theories and Kaysing as fringe crack pots and blocked them at every turn? BigK HeX (talk) 06:48, 17 August 2010 (UTC)

It is an interesting question that Misessus asks. Of course, it is possible to object that nothing like Wikipedia could exist at that time as the church acted as sole arbiters of truth and the communications infrastructure was such that most people did not have access to information about current controversies. Information was handed down from on high. It is even easier to object that the Ptolemaic Geocentric model has the Earth as a sphere not as a flat disk, which was a popular superstition believed only by the uneducated.

To take the question at face value though, a Wikipedia of the time would certainly cover the matter as follows:

• Detailed coverage of the Ptolemaic model acknowledging its official status and general acceptance in both the Christian and Islamic world but also pointing out that it has problems and that alternative theories exist.
• Separate coverage of the Heliocentric theory explaining its claims as well as its status as an emerging theory, its own accuracy problems (remember that until the elliptical nature of plantary orbits was discovered the heliocentric model was no more accurate than Ptolemy's) and its condemnation as heresy.
• Detailed coverage of the Earth's spherical shape and the various estimates of its size.
• Separate coverage of flat earth beliefs setting out their history and status as fringe.

Now, I leave it as an exercise to the reader to build their own analogy around this. Are the Austrians the brave pioneers of a new theory of inflation in the style of Copernicus, or are they the ones stuck in the mud of previous centuries discredited beliefs like the flat earth believers?

Analogies can be interesting but they can also be quite arbitrary. You can normally craft one that flatters your own position. Amusing though this has been, it doesn't actually help to point the way forward on issues of inflation. It does help to clarify the correct approach that Wikipedia should take in a controversy though, so it hasn't been a complete waste of time. --DanielRigal (talk) 08:27, 17 August 2010 (UTC)

Heh... you're too kind in actually expending so much typing on such a self-serving hypothetical. For a serious response, I would have said that it's barely worth just pointing him to WP:NOTCRYSTAL and WP:UNDUE and being done with it. BigK HeX (talk) 08:47, 17 August 2010 (UTC)

Nice analogy, but kind of misleading. Nobody involved in this page is questioning whether 'monetary inflation' and 'price inflation' exist. The only debate is what they should be called. This page equates 'price inflation' with 'inflation', because that is the most common terminology today.

So a better analogy is: if Britain had a much larger population than America, would the spelling 'colour' be more common than the spelling 'color' in Wikipedia articles? Yes, it probably would. Would that matter? No. Rinconsoleao (talk) 11:12, 17 August 2010 (UTC)

Agree with Rinconsoleao - see WP:COMMONNAME. Morphh ^(talk) 11:19, 17 August 2010 (UTC)

Seems we should probably have a link to Monetary inflation either in the "About" tag or add the wikilink in the third paragraph where we describe the effect. Morphh ^(talk) 11:33, 17 August 2010 (UTC)

This page is about a general rise in the level of prices. For a increase in the money supply, see Inflation (monetary). For the expansion of the early universe, see Inflation (cosmology). For other uses, see Inflation (disambiguation).

Morph raises a good point. The difference between the shape of the earth and inflation is that the former is a question of theory, the latter a question of defining the meaning of given word. It is a well documented fact that inflation originally meant increase in the supply of monetary units. Not even the most hysterical anti-Austrians (like BigK Hex) can dispute that fact. Inflation was a specific action taken by specific parties, usually the state, but also by banks. Going further back in history, it was the exclusive perogative of the king. Then inflation referred to the specific actions of coin clipping and diluting.

The word inflation replaced the earlier terms coin clipping and diluting mainly because of the simple fact that governments and banks didn't clip coins or dilute them, they printed paper money instead. The action itself, its dynamics and its purpose remained unchanged. It was only in the 20th centurie some economists started to equate inflation with rising consumer prices. It is an observable fact that the money supply started to increase after the Fed was founded, and that the price level has risen almost continously since then. For whatever reason, more and more economists started to follow the rise in prices instead of the increase in the supply of money. Due this shift, the meaning of the word inflation shifted too.

This is interesting, because due to the very well documented history of the origin of the word inlfation, we can clearly state the mainstream is in fact using the word wrongly. And again, there is no theory of the origin of the word inflation, it is well documented. There are however competing theories concerning the effects of inflation. What Wikipedia should ask itself is this:

Should the encyclopedia support the mainstream view even though it is demonstrably wrong?

Misessus (talk) 12:46, 17 August 2010 (UTC)

The definitions of words change. One could make a point for moving this article to Price inflation, and creating Inflation as a disambiguation page, but one cannot deny that the mainstream definition of "inflation" is "price inflation". We (Wikipedia) should not use words differently from the mainstream, although we should note alternate definitions. — Arthur Rubin (talk) 13:29, 17 August 2010 (UTC)

By the way, there is an Inflation (disambiguation) page, and it does provide a link to Monetary inflation, and it notes that what is usually nowadays called 'inflation' is also sometimes more specifically called 'price inflation'. Rinconsoleao (talk) 10:52, 18 August 2010 (UTC)

I remember that this type of article restructuring was discussed some time ago. I remember being in favour of it to start with and then being persuaded otherwise, although I no longer remember the specific arguments. I am sure it is in the archive somewhere. It would be worth looking at why this was not agreed on last time before restarting any serious discussion on it again.

Putting Monetary Inflation as a specific item in the disambiguation at the start of the article seems reasonable to me. --DanielRigal (talk) 16:13, 17 August 2010 (UTC)

It is true that definitions of ordinary words change over time. However, scientific terms seldom change. But even so, we can at least establish that there is no dispute as to the original meaning of the word inflation. Going back to my original thought experiment, the correct analogy would be the following:

If the great majority of people became overly religious and went back to the old church doctrine according to which the sun revolves around the earth, this view would soon become mainstream. There would be many who knew that this was wrong, but they'd be the minority. In that scenario, would Wikipedia change its entries on related subjects, so that most attention would be given to the view that the earth is the centre of the universe, with only a small section devoted to an opposite "theory"?

According to current rules and principles, the answer is yes. The real question is: Why would it be harmful to moving this article to Price Inflation as a disambiguation page? As I've noted before, there is no theory of inflation regarding what inflation is. There are many types of inflation, price inflation and monetary inflation being the most well known. Wikipedia would be much more informative and correct in having one article called Price Inflation, which defines the term a rise in the general price level, an one article called Monetary Inflation, which defines the term as an increase in the supply of money. Plain and simple. Then you can add whatever sections you want on the consequences of both types of inflation, what causes prices to rise, in what ways can the money supply increase and so on. The articles would be much more readable and generate much less controversy. What possible objection can anyone have to this compromise? Misessus (talk) 00:03, 18 August 2010 (UTC)

Price inflation already redirects here. Please read the Manual of Style on naming WP:NAME, where it states that, "Articles are normally titled using the name which is most commonly used to refer to the subject of the article". Almost everyone uses the term 'inflation' to refer to a general increase in price level, very few use 'price inflation', therefore, this article is correctly named. LK (talk) 04:12, 18 August 2010 (UTC)

The article may be correctly named according to the manual, but it could be more correct from a scientific point of view. Maybe it is time to start discussing the rules and principles of Wikipedia itself, as they seem be in dire need of updating. Is there a forum for that discussion?

Misessus (talk) 06:53, 18 August 2010 (UTC)

Goodluck with that. In my experience, the community takes a dim view of people trying to change policies to further their particular causes. In the mean time, those of us who think that the rules are working just fine will continue to follow the policies and guidelines as currently written. LK (talk) 07:01, 18 August 2010 (UTC)

A long time ago, the section "related definitions" was close to the beginning of the article. It distinguished between inflation, deflation, disinflation, etc., and also mentioned how the word "inflation" has been used to refer both to "price inflation" and to "monetary inflation". I think it would be an improvement if "related definitions" were moved prior to the "history" section. The "related definitions" section should mention that most economists now use "inflation" to mean "price inflation", but that it was earlier used to mean "monetary inflation", and that some schools of thought still use the word in this way. A link to "monetary inflation" should be included in the "related definitions" section. Rinconsoleao (talk) 08:53, 18 August 2010 (UTC)

The opening sentences of the history section serve the same purpose, so I don't see a pressing need for this, although I have no objections either. --DanielRigal (talk) 09:03, 18 August 2010 (UTC)

"Related definitions" should probably come earlier, because it serves primarily to disambiguate a bunch of closely related concepts (which should include the price inflation/monetary inflation distinction). Related definitions usually come very near the lead in Wikipedia articles. Here they have gotten crowded out by the history section precisely because "history" addresses the debate about how the use of the word "inflation" has changed over time, and has grown over the course of edit wars. But the simple fact that competing definitions exist should come earlier, without the need for a long historical discussion. Rinconsoleao (talk) 09:22, 18 August 2010 (UTC)

What now?

So as soon as the protection was lifted, BigK Hex removes almost the entire Austrian Section without any prior consensus whatsoever? What does the rules say about that? The last discussion was about a three sentence addition I made, which obviously was ok after I had explained it. How can it be allowed to remove so much without prior consent? Isn't that essence of vandalism? I will restore the Austrian Section to its August 17th format unless anyone besides BigK objects AND is able to actually argue for his case. Misessus (talk) 20:36, 30 August 2010 (UTC)

Well, if you want to be blocked that badly, Misessus, I'm sure I can oblige you. --SarekOfVulcan (talk) 20:44, 30 August 2010 (UTC)

If by "obviously OK" you mean that the last comments made to you (by editors besides myself) amounted to:

1. "In the mean time, those of us who think that the rules are working just fine will continue to follow the policies and guidelines as currently written." In response to your claim that it might be time to 'update' Wikipedia policy, and
2. "the ... sections of the article make perfectly clear that your argument here is mistaken" and
3. "For me, the addition seems ...expanded detail... rather than a necessary part of a summary overview.

For you to suggest that your edits were deemed "OK" is dubious at best, and disingenuous at worst. BigK HeX (talk) 21:09, 30 August 2010 (UTC)

Frankly, I find it absurd for Misessus to complain about my edit to that section not having "prior consensus" after he unilaterally modified the section almost immediately after a collaborative effort just unanimously satisfied a group of editors trying to strike a balance on the weight of that section. BigK HeX (talk) 21:33, 30 August 2010 (UTC)

Why is it so hard for you to have a rational, honest discussion? I responded to the claims and concerns raised by Rinco and corrected him on those claims and concerns, and as far as I can see, no one countered that response. Even in your edit you let the addition remain, but deleted the rest. That is what I found strange. The deleted text had a long standing consensus behind it, the debate was about the addition I made, and my case was obviously accepted, even by you.

From your typically hysterical response it is clear that you don't even know (or care) what you are talking about. I will restore the section to what it was prior to your deletion. It had a long standing consensus, and the three-sentence addition I made to that consensus text has been argued for.

To be completely honest, I find it very troubling that the people engaged in editing economics articles seem very unaware and quite frankly uneducated about the subject. Rinco's claim that sections of the article proves that my argument was mistaken is yet another proof of that. Your inability and obvious unwillingness to discuss the issue properly combined with your unilateral deletions prove that you should not have any part in editing this article. Misessus (talk) 23:12, 30 August 2010 (UTC)

RE: "Why is it so hard for you to have a rational, honest discussion?"

Oh... you wanted to engage in a rational discussion with me??? Forgive me if I came to a different conclusion when I read,

I will restore the Austrian Section to its August 17th format unless anyone besides BigK objects

If it wasn't clear already, my earlier comments were not directed at you. After you unilaterally decided to overturn the collaborative effort of 3 editors, it was exceedingly obvious to me that you support only your own edits. Participation by others in the community will ultimately resolve this dispute, and my comments here have been for any interested observers. You probably shouldn't expect me to direct any further comments on this particular matter to you as I have no interest in humoring your snide personal attacks. BigK HeX (talk) 23:39, 30 August 2010 (UTC)

I also support Morph's version of the article [2], and would oppose any addition to the AS section due to concerns about undue weight. LK (talk) 04:26, 31 August 2010 (UTC)

Attacks? You're hardly the one to talk, BigK. You've made your personal agenda known since day one. And what "collaborative effort" are you talking about? I made a very important and motivated addition to a consensus text, and I argued for it. Then you delete the whole section, but leave the addition I made. If there is anyone who's overturning collaborative efforts its you. But as said, you clearly have no interest in a balanced article, you're just interested in removing the Austrian School, something you pretty much said in your first comment on this talk page.

At any rate, this whole thing is getting ridiculous. No one has been able to present just cause for why the Austrian section should be almost non-existent. No matter all the references to Wiki-rules, this point has never been argued for properly. The briefest of glances at the world today tells anyone that the Austrian school has a disproportionate influence today, an influence that is growing every day. If there were any true concerns about undue weight and things like that, many other things would be discussed here, but the only thing discussed is the Austrian school. Any effort to protect the integrity of the article is met by hysteria, and should any editor dare to stick by what is right, he gets blocked. This is why Wikipedia has no credibility whatsoever when it comes to economics. Its bias is known to everyone, and this whole talk page is a testament to that bias.Misessus (talk) 00:36, 1 September 2010 (UTC)

It would be best if editors here observe the No Personal Attacks rule, and refrained from commenting about other editors. Please restrict all talk page comments to comments about the article and edits to the article, and refrain from commenting on an editor or group of editors. Failure to observe this policy can lead to the offender being blocked from editing Wikipedia. LK (talk) 09:07, 1 September 2010 (UTC)

Why have land prices have appreciated much faster than CPI?

In reading Henry George, who advocated a single tax on land in the late 19th Century, I noticed that land prices in the my area ca. 1985 were $1/acre and now they are several thousand per acre. This it more than 100 times the change in CPI. This is true throughout the U.S. Also, look at land prices in Japan at the peak in the 1990s. It seems that land prices rise exponentially in response to population growth. Does anyone know of any research on this?

The price rise in your area sounds drastic. On the edge of an expanding urban or industrial area, perhaps? $1/acre sounds very cheap.

You mention Japan as an example. However, after the pronounced peak in Japanese land prices, the Japanese population continued to rise as before. IIRC, land prices in Japan have not risen much faster than CPI for quite a while. Land prices are not simply a function of population; they are determined by complex supply and demand stuff. Regulation can make a big difference between countries, too. (For instance, in parts of Europe, a green field is relatively cheap but a green field with permission from local government to put buildings on it is expensive).

However, this shouldn't really be a forum for discussion of inflation as a concept. Do you have any suggestions for improving the article? bobrayner (talk) 22:06, 27 September 2010 (UTC)

Here is some actual data, although this is pist 1985 residential property in the U.S. and the land price is derived by extimating the replacement value of the structrue (single family house) and applying depreciation:http://www.lincolninst.edu/subcenters/land-values/metro-area-land-prices.asp There is a link to download an Excel spreadsheet. The drawback of this data set is that there is huge variability (a factor of greater than 10) in price between different metro areas.Phmoreno (talk) 02:43, 30 September 2010 (UTC)

Speaking As An Austrian...

I've read the debate about the Austrian School view with some interest. There's no doubt that the Keynesian/post-classical definition and explanation of inflation is wrong. Inflation is debasement of the currency, and there is no doubt about that to anyone who can do math and approaches the subject honestly.

Unfortunately it's not Wikipedia's job to say that. It's wikipedia's job to describe the received wisdom at the current time, because it is an encyclopaedia. If Wikipedia were to exist in 1890, it would say that science has shown that the black man and the feeble minded should be discouraged from breeding and it is the job of the White Man to benignly govern the lesser races. If Wikipedia existed in 1950, it would say that Plate Tectonics is a fringe theory with little support in the scientific community. It's not an encylopaedia's job to challenge the mainstream, it is an encyclopaedia's job to report the mainstream.

As such the majority of the article should report the Keynesian macroeconomic nonsense, until such time as the light of reason breaks over the economics profession. The Austrian view, unfortunately, only deserves minor reporting, like some crazy man in 1890 saying that blacks and whites are equal, or a loony Plate Tectonics crank in 1950. Austrians must prove the Austrian case in the wider world, and then Wikipedia will report that. That's my take on the issue, pain me as it does to say so.82.71.30.178 (talk) 00:20, 30 September 2010 (UTC)

Takes a lot of rationality to accept and re-confirm the above. Kudos to you. BigK HeX (talk) 20:56, 11 October 2010 (UTC)

Issue with Austrian School/Monetarist or other -ist Ideological or Philosophical Slant

Replying to the "Austrian School" poster who is Anonymous - The problem with even having Austrian School, Monetarist, and related Heterodox (which means "minority") economic views represented in the article is that it appears to be sidestepping an opportunity to explain inflation to ordinary readers, and presenting what appears to be a slanted ideological or philosophical point of view that is not based on the facts behind inflation that has actually occurred in the real world. The statement that "most" economists say that both regular inflation (does not appear to be true) and hyperinflation (is sometimes the case) are caused by the government printing more money implies concepts such as that the Supermarkets recently (a few years ago) raised their food prices only after observing exactly how many dollar bills the United States printed that year, and that all the gas stations raised their prices after observing how much money the USA or Europe printed in their mints that year. But it has been the case that the United States and other nations that have not suffered a currency collapse in their entire history have been extremely careful about not simply printing "phoney money" to pay debts, but that most money printed is proportional to the number of people in the population (based on the census) and to replace the so-often regularly destroyed bills. The strength of the US dollar with the ever present fact that inflation lowers its buying power over time contradicts the idea that the main cause of inflation is related to how much money the government prints in the mint. The policy to not overprint bills and use them to pay government debts is not a right or a left wing policy but simply a cautious policy that governments use to keep their money stable.

The Austrian/Monetarist school unfortunately also has very strong links to right wing think tanks and foundations that give money to promote free market/corporate policies, according to Political Research Associates and other groups that monitor such organizations. Taking them too seriously in a Wikipedia article would be the same as using Marxism or Leninism or any other -ism, left or right, to explain inflation... when what is needed is simply an explanation of what happens, and then actual evidence that is heavily referenced to explain inflation from the past and at the present. At bests economic "reason-ists" or philosophers - pretty much anyone who claims to know why inflation happens, should be taken with a grain of salt. What matters is the bare fact and the evidence.

One example here that needs to be noted is that it is stated in this very article that back when there was an influx of gold to Europe from the new world, inflation went up wildly. This gives further proof that the government printing money being the main cause cannot be the sole reason for high inflation unless we can find some source to reconcile this contradiction which should be noted in the article. Take the example, if a government eliminated the printing press there would still be inflation for the pure fact that sellers can set any price they like and sometimes they compete with each other for the highest prices they can get away with, not simply the lowest ones. It should also be clear that philosophies representing business interests would tend to gloss this over. Unless one were to take into account the self interest of the people selling goods and with control of finances, it would be hard to understand why prices went up. It is entirely possible that some or even most inflation is caused by corporations and businesses in general raising prices, because of course once a dollar can no longer buy a cup of coffee or 12 eggs or 1 gallon of gas then a dollar is worth less regardless of whether it is a paper dollar or a gold dollar. If there is no mention of this or if it is relegated under some kind of obscure jargon labels instead of connected to real documented facts then the article is not useful in understanding what Inflation actually is, merely useful for reading what some people claim Inflation is.

The Austrian and Monetarist "schools" of economics appear to behave in a way consistent with public relations and marketing departments that give a glossy image to their own assets and interests but push blame onto others.. either the government, or consumers. If this were a purely Marxist or Leninist definition then we would similarly find inconvenient facts and evidence being overlooked. The behavior of members and followers of the Austrian and Monetarist school seems to consistently show that it is more of an ideological organization than an actual neutral economics-information-entity because the members wish to have all explanations of economics made by the Austrian School, or based on the writing from their publications and books. It is as though the world needs to be "evangelized"... the problem is that this is highly subjective, and there's a lot of evidence that this subjectivity rests, in this case, in the lap of the wealthy and property owners. Obviously there are other groups that will distort economic explanations and ignore factual evidence. I want to make it absolutely clear that all of these philosophies (that have a real history and significance) have a right to be described on Wikipedia, it woudl be improper to allow them to "bleed" over from subjective topics like "what a person believes in", to objective ones like "what caused the recent inflation" or "what caused inflation in year X". Wikipedia needs to be useful to everyone, from all sides, and must contain objective scientific data when it describes a phenomena.

Austrian and Monetarist school essayists and philosophers tend to use terms like "reason" and "rational" and "liberty" a bit too much, and euphemisms abound in economic explanations. Another problem is the labeling of any explanation that differs from what is preferred as "Keynsian" or "post classical" is that this sets up the entry to be more of a polemical POV piece than actual documentation and explanation of an economic event or trend. While I sympathize with sort of true believer's desire of most everyone to have their point of view put forward, right or left, as the be-all-and end-all of explanation and discussion, it is extremely problematic to have any kind of projections or suppositions or math formulas instead of the real factual and direct information. Information about the effects and incidents of past cases of inflation, and information on the policies specifically from individuals in charge of the money system, and in charge of major corporations and other institutions with a lot of power (I woudl say labor unions but in many countries they are extremely weak.)

This article is not about David Friedman or von Mises, or Keynes, this is about Inflation... the world is not made a better place when specific POV's and labels that re-enforce them are present in Wikipedia. If we would like to have an article about people who try to interpret economics for political reasons, then by all means we should have a section or entry like that, but it appears there is a very serious problem right now with this article resembling an essay in an Ayn Rand/Objectivism publication. What we need is an article that explains the bare bones facts to people, and they can go to their philosophical schools afterward, but not before-hand. Look at articles about things like the American Civil War or the Hungarian Revolution of 1956... actual events are described and documented and opinions are specifically indicated as opinions or statements and not "theory". But the inflation entry does not talk about real phenomenons but projections but what appear should all suffer for a lesser understanding of it.

There should be a serious decision as to whether economic language that reduces an understanding of Inflation to something bland, mysterious, dull, and seemingly unconnected to every day events we see in front of our faces. While there are statements like "the government prints more money so the value of the dollar goes down and most economists believe this", yet the article is also laden with euphemisms and the act of leaving out other crucial information (do the stores actually check how many dollars are printed by the US mint and then adjust prices accordingly? Where is the evidence?), and much of the explanations of various economic behavior by businesses are similarly made archaic and difficult to understand. If this were an issue like the behavior of cells and how they split and the way DNA's structure leads to different effects in different parts of an organism, I would expect a certain amount of labels that are unknown to the public.. but in the case of inflation there is no such need whatsoever. If this article were about "certain economists special language" then perhaps so. --Radical Mallard (talk) 07:57, 23 December 2010 (UTC)

Definition of inflation and proposal for changing this article's name to Price Inflation

I know this has already been brought up in a thread above, but I wanted to repropose changing this article's name to Price Inflation. Personally, I have always thought of "inflation" as meaning general currency devaluation - ie monetary inflation. I can find lots of sources that directly or indirectly use inflation to mean monetary inflation: [3] [4] [5] hubpages.com/hub/What-is-Inflation-How-it-is-calculated-How-it-affects-a-nations-Economy_. This article talks about how everyone who defines inflation as rising prices is wrong: [6]. And this article talks about how no one can agree to what "inflation" really means: [7].

Because of this, I think it is misleading to assume that when "inflation" is used alone, that it means price inflation the vast majority of the time. This article should be renamed to Price Inflaion, and the Inflation page should be the disambig. Comments? Fresheneesz (talk) 09:17, 15 November 2010 (UTC)

Regarding LK's revert of my edit, I did look at some of the most recent archives that talked about changing the article's title. Looks like there were a few independent cases of people moving the article to Price Inflation. The agreement to move it back was by and large mostly because there had been no discussion about it. There was very little real consensus about whether or not it should be moved - regardless of whether it should be moved back when a user moves it without discussion.

So I'd like to come to a consensus about that. But first, why did you revert my edit LK? I didn't move the article. I'm simply clarifying that "inflation" usually means "price inflation", but *not* always. I'm certain that you agree with me on that point ("inflation" doesn't always mean "price inflation"). What the problem with making sure that all readers know what we're talking about? Fresheneesz (talk) 23:16, 15 November 2010 (UTC)

We use the terminology and definitions used in reliable sources. TFD (talk) 00:10, 16 November 2010 (UTC)

I doubt that anything has changed in the literature to modify earlier consensus, which determined that RS would overwhelmingly support the current structure. BigK HeX (talk) 02:57, 16 November 2010 (UTC)

I've brought up multiple reliable sources that do indeed say that inflation is *monetary* inflation. Other sources talk directly about how "inflation" is generally meant in one of *two* ways. Its clearly reasonable to report (in this article) that there are a few sources that use "inflation" slightly differently, and that what we're talking about is price inflation. Also, none of this explains why my edit was reverted. Is it not true that price inflation is sometimes called... price inflation? Why was that edit reverted? Its standard practice on wikipedia to list all the different names of a topic upfront. Fresheneesz (talk) 08:14, 16 November 2010 (UTC)

What about just "...price inflation, or simply inflation,..." ? Fresheneesz (talk) 08:36, 16 November 2010 (UTC)

Except for Austrian school economists, no modern source confuses a growth in the money supply with inflation, and very few use the terminology 'price inflation'. The economics literature is not confused about this, the term 'inflation' always refers to increases in the price level. There are several textbooks already referred to in the article, and I can quote from the >10 macro textbooks on my shelves on this. If you wish to dispute this, please point to even one mainstream economics textbook (published in the last 10 years) that does not use the term 'inflation' to refer to increases in the price level. LK (talk) 08:16, 17 November 2010 (UTC)

"Except for Austrian school economists, no modern source confuses a growth in the money supply with inflation" - do you have a source for that one? Its very clear that some readers have been confused that this article is titled "inflation". It makes total sense to clarify what this article is about. Fresheneesz (talk) 08:43, 17 November 2010 (UTC)

As I pointed out earlier, the article already cites several textbooks about this definition. See footnote [1] where it states:

See:

• Wyplosz & Burda 1997 (Glossary);
• Blanchard 2000 (Glossary)
• Barro 1997 (Glossary)
• Abel & Bernanke 1995 (Glossary)

If you push me to do so, I will check and cite the shelf of macro textbooks behind me. But I can assure you, from reading hundreds of macroeconomics papers over the years, that the academic literature is not confused about this, the distinction between inflation and money supply growth is clear. If you want to push your case, kindly point to one mainstream economics textbook (published in the last 10 years) that does not define the term 'inflation' as an increase in the general price level. LK (talk) 09:19, 17 November 2010 (UTC)

One good source is sufficient. The onus is on Fresheneesz to present a source that contradicts the one LK provided. TFD (talk) 16:38, 17 November 2010 (UTC)

I'd simply note that I'd be disinclined to qualify "randomUnprofessionalEconWebsite.com" as a solid basis for challenging a topic that is so thoroughly covered in the academic literature. BigK HeX (talk) 17:33, 17 November 2010 (UTC)

Look, I'll admit I was confused about one thing: that this article is talking about monetary devaluation. I for whatever reason didn't see that the "rise in prices" its talking about is more or less synonymous with monetary devaluation. I also misunderstood the term "monetary inflation" to mean the same thing as "monetary devaluation".

While I was wrong about that, I would have appreciated much less hostility from you guys - and it would have made the conversation much more pleasant and short.

Also, I do believe putting the term "price inflation" in the definition is warranted if it generally means the same thing as "inflation" alone. In fact, this article says as much in the "related definitions" section. I'll repeat that it is standard to put all the terms used to describe a topic at the top along with the basic definition. Fresheneesz (talk) 21:55, 19 November 2010 (UTC)...gen blazers

As a word of caution, confusion is very likely to ensue for people who have allowed some of the fringe economics literature (which often gets touted on the 'Net) to dominate their research in topics such as this. Almost by definition, a person who learns largely from fringe sources would have difficulty in writing an article that approximately reflects the balance of available scholarly literature. BigK HeX (talk) 02:04, 13 December 2010 (UTC)

Place "Related definitions" second.

Following my previous comment, I would suggest moving the first two sentences of the 'History' section to the 'Related definitions' section. And I would suggest placing 'Related definitions' immediately after the lead section, before 'History'. That way related concepts are spelled out at the earliest possible point in the article, including the price inflation/monetary inflation distinction that causes so much debate.

The following is my suggestion for the section. I removed one sentence on 'Asset price inflation' that is covered adequately elsewhere in the article. Rinconsoleao (talk) 13:30, 19 August 2010 (UTC)

The term "inflation" originally referred to increases in the amount of money in circulation, and some economists still use the word in this way. However, most economists today call an increase in the money supply monetary inflation, to distinguish it from rising prices, which may also for clarity be called 'price inflation'. Economists generally agree that monetary inflation is one of the main causes of price inflation.

Other economic concepts related to inflation include: deflation – a fall in the general price level; disinflation – a decrease in the rate of inflation; hyperinflation – an out-of-control inflationary spiral; stagflation – a combination of inflation, slow economic growth and high unemployment; and reflation – an attempt to raise the general level of prices to counteract deflationary pressures.

Since there are many possible measures of the price level, there are many possible measures of price inflation. Most frequently, the term "inflation" refers to a rise in a broad price index representing the overall price level for goods and services in the economy. The Consumer Price Index (CPI), the Personal Consumption Expenditures Price Index (PCEPI) and the GDP deflator are some examples of broad price indices. However, "inflation" may also be used to describe a rising price level within a narrower set of assets, goods or services within the economy, such as commodities (including food, fuel, metals), financial assets (such as stocks, bonds and real estate), services (such as entertainment and health care), or labor. The Reuters-CRB Index (CCI), the Producer Price Index, and Employment Cost Index (ECI) are examples of narrow price indices used to measure price inflation in particular sectors of the economy. Core inflation is a measure of inflation for a subset of consumer prices that excludes food and energy prices, which rise and fall more than other prices in the short term. The Federal Reserve Board pays particular attention to the core inflation rate to get a better estimate of long-term future inflation trends overall.

I think this looks good. To be consequent, however, I suggest adding decreasing money supply as the alternative meaning to deflation. This because it is already stated that inflation normally refer to either rising prices or increasing money supply. From that follows that deflation means either falling prices or decreasing money supply. Misessus (talk) 20:26, 19 August 2010 (UTC)

In most articles with a history section, the history section comes first. I see no reason to deviate from the usual order here. Also, I have not seen any reliable source stating that deflation is a decrease in money supply. One is required before introducing such an assertion into the article. LK (talk) 00:02, 20 August 2010 (UTC)

I think it would be useful in this case because (1) the definition stirs up so much controversy with a certain subset of users and (2) for ordinary users with little background in economics there are many, many concepts related to inflation that people get confused about. Disambiguating all that before plunging into 'History' would make the article more user-friendly.

Another reason to make the rearrangement I suggested is that currently the purpose of the 'History' section is unclear. Is that section intended to describe the history of the definition of inflation? The first sentences (about 'monetary' vs. 'price' inflation) make it seem so. Or is it intended to describe the history of inflation itself? The paragraphs on gold and silver from the New World, or effects of the Black Death, make it seem that the section is about the history of inflation itself. Or is it intended to describe the history of theories about the causes of inflation? That's what the last two paragraphs seem to address.

So to better restructure the article, I would suggest moving the statements about the history of the definition into the 'Related definitions' section (which should therefore be placed second). Discussion of the history of the theory would be integrated into the theory sections that follow below. The 'History' section would then discuss the history of inflation itself, which would be more in line with other Wikipedia articles.

By the way, a section on the history of inflation is obviously incomplete without a paragraph noting that since the introduction of fiat money, inflationary episodes have become much more severe. Should discuss episodes of hyperinflation, such as Weimar Germany.

Further comments appreciated. If I don't get objections, I will make these changes myself. Rinconsoleao (talk) 14:47, 6 September 2010 (UTC)

As for 'deflation', of course those who use 'inflation' to mean an increase in the money supply use 'deflation' in the opposite sense, as Misessus' example below shows. But I would not be in favor of cluttering up the definitions section with such an obvious point. Rinconsoleao (talk) 13:40, 20 August 2010 (UTC)

"Also, I have not seen any reliable source stating that deflation is a decrease in money supply." How is it that someone so completely ignorant of basic economic, and essentially every second discussion on financial talk shows for the past two years, TV and radio, is in charge of editing this section? —Preceding unsigned comment added by 24.153.223.84 (talk) 17:23, 8 February 2011 (UTC)

See for instance "Is Deflation Really Bad for the Economy?" (http://mises.org/daily/4618) or page 74 of Murray Rothbard's "What Has Government Done to Our Money". Deflation is the opposite of inflation. If inflation is defined as increase in the money supply, how can deflation mean anything but a a decrease? Deflation is often used by mainstream economists when arguing that the US is not headed for runaway inflation. Their argument is that when e.g. a large number of mortgages default, i.e. loans go bad, this will contract the money supply and this contraction will surpass the moneyprinting by the Fed. Misessus (talk) 06:06, 20 August 2010 (UTC)

Debt relief as a "positive"

This article mentions debt-relief as a positive effect of inflation a couple times. This sounds completely ridiculous to me. This is like saying that theft has positive effects - ie the thief gets more money. Of course, the victim gets their crap stolen (obviously a negative). Inflation-related debt relief does the same thing. Its beneficial to those in debt, but clearly at the expense of lenders. How can anyone in their right mind say that "debt relief is a positive effect of inflation" ? Plus, at a constant rate of inflation, there is no "positive" or "negative" debt-related effect of inflation - since lenders simply charge extra interest to make up for the expected rate of inflation.

I suggest that debt relief be put in the "general" effects section, rather than in the positives section. Of course, I still think it is perfectly valid to say that "some have said" (or similar wording) that debt relief is a positive effect of inflation. Fresheneesz (talk) 09:28, 15 November 2010 (UTC)

I suggest finding out what reliable sources say on this issue. We write articles based on what reliable sources say. Not on what individual editors think is reasonable. LK (talk) 09:49, 15 November 2010 (UTC)

I think its helpful to have a logical discussion with or without sources. If you can find some good sources, please go ahead and add them as useful discussion to this thread. Telling me essentially that my thoughts don't matter isn't really appreciated...

In any case, it is confusing to me in what way this is "positive" and so if it is "correct" in this assertion, I think it should be clarified. Fresheneesz (talk) 23:04, 15 November 2010 (UTC)

Unfortunately, though it may be brusque, your opinion -- alone -- of what is ridiculous really isn't helpful. Of course, neither would mine or LK's. As you are very likely aware, that's just a fundamental pillar of how Wikipedia works. Certainly, we are entitled to speak about our experiences with reliable sources on the topic, but with that being the case, discussion on article talk pages should come with sourcing.

As for your (unsourced) objection, I'll just go ahead and say that it seems pretty overwrought. People who loan out money for some lengthy term are presumed to be quite aware of the possibility of inflation. If someone willingly draws up a contract to give out a loan anyways ... how can there be "theft" involved? Your posts seem to indicate that you approach economic matters from the similar viewpoint as groups that would generally look at this contract and demand that it is valid and should be honored and enforced by the full weight of the law. BigK HeX (talk) 03:10, 16 November 2010 (UTC)

I'm not a newb on wikipedia, BigK. I understand multiple reliable sources and all that. But sources are *not* needed to discuss how an article should be made better - you know that. So don't give me that bs, please.

The "theft" is not from either party that signs a loan contract - its from the source of inflation (the printer of money, or the more nebulous society that stopped being so productive). Yes lenders know there is inflation and charge interest partially based on it - but that makes the debt-relief non-existent. I don't understand your thought about groups that would demand a contract be enforced by law. My question to you now is, in what way is this positive? How does inflation related debt relief have an overall positive effect? This isn't in the article, and should be. Otherwise stating it doesn't teach anyone anything useful. Fresheneesz (talk) 08:00, 16 November 2010 (UTC)

"But sources are *not* needed to discuss how an article should be made better"

Generally, except on the most trivial matters (grammar, uncontroversial facts, easily source-able assertions, etc) I feel that sources are needed to discuss improvements on an article's talk page. With that said, other editors may humor any unsourced objections, but I am unlikely to return to this thread until there are sources presented. BigK HeX (talk) 13:16, 16 November 2010 (UTC)

The thing is, I'm not proposing introducing any new facts. I'm only discussing how best to present the facts that are already there. Surely you can agree that no sources are required for that - I don't even know how you would use a source for that. Fresheneesz (talk) 01:49, 17 November 2010 (UTC)

Also, there is no source for the debt-relief statements on the page. By your logic, I should just remove it without comment. Fresheneesz (talk) 01:57, 17 November 2010 (UTC)

I hadn't looked at it, but tag or remove it, if it really bothers you. I don't really see how it is a controversial statement, though. Aside from being fairly self-obvious [people being able to effectively pay less for something is seen by those people as "good"], it's pretty easily sourced. BigK HeX (talk) 06:18, 17 November 2010 (UTC)

It makes me sad that you don't want to discuss the logic of this with me, BigK. I'd like to have a nice fulfilling conversation with you : ) . I may tag or remove it, but I'd like to just quickly discuss it... (below) Fresheneesz (talk) 00:10, 19 November 2010 (UTC)

BigK, sure it seems obvious that when people are able to effectively pay less for something, it is good *for those people*. I would say if the inflation is larger than people expect, then yes the inflation would be 1. good for borrowers, but 2. bad for lenders (in equal amounts, so the effect on the economy at large with respect to debt-relief is neutral). If the inflation is smaller than people expect, this is actually bad for borrowers, since their lenders already charged them interest in anticipation of a certain inflation rate.

Given those two scenarios, I think its a little confusing and perhaps misleading to say that inflation related debt-relief is simply "good" without qualifying when or why its good, and for whom. Because of that, I think it makes more sense to put it under "general effects", unless you think it makes more sense to include debt-relief both under positive and negative sections. Fresheneesz (talk) 00:10, 19 November 2010 (UTC)

I'd say that implicit in the term "debt relief" is a perspective from the POV of the borrower. So, I'm not sure that I could agree with the assertion that "the effect on the economy at large with respect to debt-relief is neutral". In any case, the article does already mention that there is a negative effect for lenders.

I agree with your point that some elaboration is in order. Elaborating that it is increasing inflation that benefits borrowers (as opposed to just the presence of inflation) would be an improvement. BigK HeX (talk) 04:59, 20 November 2010 (UTC)

Can do. Fresheneesz (talk) 20:02, 20 November 2010 (UTC)

Actually, I take that back. I find it a little inconsistent that all the other positive and negative effects of inflation are just about inflation itself, rather than changes in the rate of inflation. And the fact that the effects of the rate of inflation change on loans can be either positive or negative (for either the borrower or the lender), I think it makes sense to move it into its own section, or the general section - or find somewhere else for that discussion. Thoughts? Fresheneesz (talk) 20:11, 20 November 2010 (UTC)

Primary cause of inflation?

I added that the primary cause of inflation is business owners raising the price of goods and services whenever they see that consumers have more money. —Preceding unsigned comment added by 66.99.132.30 (talk) 17:47, 13 April 2011 (UTC)

Inflation is always and everywhere a monetary phenomenon

Milton Friedman stated that inflation is always and everywhere a monetary phenomenon. The fact that inflation has no effect on the real value of non-monetary items already appears in the article and is properly referenced.

In my opinion it is appropriate to show this in the lead. Isaltino Swissa (talk) 21:08, 23 April 2011 (UTC)

Milton Friedman's quote is probably the most frequently cited one line statement on inflation and deserves to be in a prominent place in this article.Phmoreno (talk) 12:33, 24 April 2011 (UTC)

It's appropriate, but not in the editorial voice. Something like Milton Friedman said "inflation is always and everywhere a monetary phenomenon" might appear prominently, but it is not an economic "fact". — Arthur Rubin (talk) 16:27, 26 April 2011 (UTC)

Three points: 1. You state: "nor should the assertion that inflation has NO effect on non-monetary values be made without including contrary statements." Where in the article - at present - is the assertion made that inflation has NO effect? It is not in the article at the moment. Please leave it in - as it was for a long time before - and now make your contrary statement which you are entitled to with a reference.

(2) The statement that inflation has NO effect was in the article for a long time before you replaced it with LITTLE.

(3) It is a fact that inflation has no effect on the real value of non-monetary items. Non-monetary items´ NOMINAL values - not their REAL values - are adjusted/affected in the price-setting mechanism in markets to allow for the eroding effect of inflation on the REAL value of money - a monetary item. Both Milton Friedman and the Turkish academics confirm that - as referenced.--Isaltino Swissa (talk) 16:58, 26 April 2011 (UTC)

Please supply a refence for the statement: "Inflation has little effect on the real value of non-monetary items." Isaltino Swissa (talk) 17:05, 26 April 2011 (UTC)

On the contrary, inflation does have an effect on the real, unadjusted, value of "non-monetary items", such as capital gains. Accounting principles make an adjustment to allow for the effect. If you want to make that statement, you need to remove the redefinition of "non-monetary" from the entire article, not just the sentence. I agree that inflation has no direct effect on relative commodity prices, which seems to be the intent of the statement, but derivatives need not be monetary to be affected by inflation. — Arthur Rubin (talk) 17:09, 26 April 2011 (UTC)

You keep on stating that inflation has an effect on the real value of non-monetary items. Milton Friedman stated that inflation is always and everywhere a monetary phenomenon. Monetary is not equal to non-monetary.Prof. Dr. Ümit GUCENME and Dr. Aylin Poroy ARSOY state: "Purchasing power of non monetary items does not change in spite of variation in national currency value." Clearly NON-MONETARY ITEMS.

You refuse to accept that.

If you do not accept the above two references I am 100% sure you will not accept my statements either. I suggest you remove the complete statement from the article right now, because that is what will have to be done in the end according to Wikipedia policy. I am now very sorry that I tried to improve Wikipedia. The statement that inflation has NO effect was part of the article for a long time. If I had not tried to improve Wikipedia, it would have remained in the article like that - as everyone accepted it before. Now the whole statement will have to be removed according to Wikipedia policy. It is a pity, but, there is nothing we can do about it. We will have to remove the whole statement. Unless you can find a reference that inflation has LITTLE effect on non-monetary items. Do you have such a reference? Isaltino Swissa (talk) 17:26, 26 April 2011 (UTC)

Be real. If "real estate" is included in "non-monetary", then the statement is outright false. As most real estate is purchased with a mortgage, which is a monetary instrument, the price of real estate is affected by the nominal interest rate which is affected by inflation. I guess the statement has to go. — Arthur Rubin (talk) 17:48, 26 April 2011 (UTC)

I'm removing the block of text here that is probably a copyright violation, on "CHANGES IN FINANCIAL REPORTING IN TURKEY: HISTORICAL DEVELOPMENT OF INFLATION ACCOUNTING FROM 1960 TO 2005" CRETOG8(t/c) 23:34, 28 April 2011 (UTC)

Companies´ capital and profits are non-monetary items.

Companies´ capital and profits are non-monetary items.Isaltino Swissa (talk) 22:05, 23 April 2011 (UTC)

I have referenced it to an International Financial Reporting Standard, namely, International Accounting Standard IAS 29. I can also reference it to the US Financial Accounting Standard Board´s and PricewaterhouseCooper´s lists of monetary and non-monetary items. It is generally known that capital and profits are non-monetary items. Isaltino Swissa (talk) 22:44, 23 April 2011 (UTC)

I have added the PricewaterhouseCoopers reference to the article. It is very explicit: "Assets and liabilities other than monetary items are called non-monetary items. Once paid in or accumulated, all elements of shareholders’ equity are non-monetary." PricewaterhouseCoopers, Understanding IAS 29, (2002), p11. Isaltino Swissa (talk) 09:30, 24 April 2011 (UTC)

Narrow-mindedness presented in this article and discussion page.

I have never before seen such narrow-mindedness against a different view as presented in this article and discussion page. Even text and references from the discussion page are deleted to hide a different, refenced viewpoint at all cost. This is certainly not a very good advertisement for Wikipedia. —Preceding unsigned comment added by 213.58.152.212 (talk) 12:14, 29 April 2011 (UTC)

I am not referring to the view against Austrian economics in this article. I am not an Austrian economist. I am referring to the hiding of creditable references to the fact that inflation has no effect on the real value of non-monetary items. —Preceding unsigned comment added by 213.58.152.212 (talk) 12:22, 29 April 2011 (UTC)

Hiding creditable references to that fact will not make inflation have an effect on non-monetary items. Wikipedia is not the only place in the world where it is stated that inflation has no effect on the real value of non-monetary items. (It is in the still available deleted edits). In 2005 the Ohio State university invited the two Turkish academics who also state that in their paper, to present that paper in America. It is impossible to hide that fact. —Preceding unsigned comment added by 213.58.152.212 (talk) 13:00, 29 April 2011 (UTC)

Even Arthur Rubin supports and demands the right to state an alternative view:

(cur | prev) 16:15, 26 April 2011 Arthur Rubin (talk | contribs) (72,435 bytes) (no -- YOU read the talk page history. It's a prominent view, but should not be in the editorial voice, nor should the assertion that inflation has NO effect on non-monetary vaklues be made without including contrary statements.) (undo)

However, this is only allowed to a select few, like Arthur Rubin, in this article and discussion page. I know this is a waste of time stating this on this page. Everything will carry on as before. I also know that hiding facts won´t undo them. —Preceding unsigned comment added by 213.58.152.212 (talk) 13:20, 29 April 2011 (UTC)

Even the simple explanation that real estate and a mortgage is not one and the same thing was deleted from this page. It is hard to believe that the people who delete these simple explanations are the people who look after this article. As I stated before: I know this is a waste of time stating these facts on this page. —Preceding unsigned comment added by 213.58.152.212 (talk) 13:31, 29 April 2011 (UTC)

Your copying of the (translation of) the Turkish paper into this talk page was removed as a copyright violation, and the "explanation" that real estate and a mortgage are not the same thing was removing, along with my comment that it was a response to. In summary, my statement was that real estate prices are affected by mortgage rates, which are affected by inflation.

As for the assertion that inflation has no effect on non-monetary values, it's disproven by the statement above. We need to list what is reported in reliable sources, but we also need to report the reliable sources that contradict them. — Arthur Rubin (talk) 15:47, 29 April 2011 (UTC)

Inflation has no effect on the real value of non-monetary items; never had in the past and will never have in the future. Per Milton Friedman, the US economist and Nobel Prize winner, who famously stated: "Inflation is always and everywhere a monetary phenomenon." —Preceding unsigned comment added by 213.58.152.212 (talk) 17:56, 12 May 2011 (UTC)

Half-life of money

An especially evocative way of expressing the rate of inflation is as a half-life of money, the amount of time it would take for the purchasing power of money to half if the calculated rate of inflation was sustained into the future. For an annual rate of inflation of 4.28%, the half-life of money is calculated thus:

${\frac {log\ 2}{log\ \left(1+{\frac {4.28}{100}}\right)}}=16.54\ years$

Compare this, for example, to the UK government's long term inflation target of 2.0%:

${\frac {log\ 2}{log\ \left(1+{\frac {2.0}{100}}\right)}}=35.00\ years$

Vibritannia (talk) 18:33, 18 October 2011 (UTC)

Picture of Inflation

Hello everyone. I'm sorry, but I must take the inflation graphic down. It's particularly bad for a variety of reasons. First and foremost, there is a glaring, obvious error: China. The graphic depicts China as having a negative or zero percent inflation rate, which is incorrect. From a policy perspective, this could be a dangerous error. China currently pegs their currency to the US Dollar; if they were to end the peg, there would be immediate deflationary pressures instead of inflation. I will try to find a more reliable graphic to substitute, but in the mean time, I must delete this misleading one. cpsteiner

Good catch. The underlying source for that map gave a higher rate of inflation for China. And once you've found one error, you can hardly trust the values for other countries... bobrayner (talk) 01:07, 15 February 2012 (UTC)

I too changed the mathmatics representation of Inflation calculation by removing the % from the first multiplier as tht does nothing and does not give the result of 4.28% it gives 0.0428 unchanged. It is not the multiplier it is the nomenclature of the answeer. Proof: 211,080-202416=8664 8664/202416=0.0428 0.0428*100%=0.0428 0.0428*100=4.28% --Robbygay (talk) 01:32, 4 April 2012 (UTC)

Countries with gold standard rarely experience inflation over 2%? Huh? What?

The section on the Gold Standard states this, yet if you look at historic rates for the U.S., the rate of inflation was over 2% many times, even spiking higher than it's been since switching off of a Gold Standard: http://en.wikipedia.org/wiki/File:US_Historical_Inflation_Ancient.svg — Preceding unsigned comment added by 68.82.230.239 (talk) 23:16, 27 February 2012 (UTC)

Are you sure the explanation of infaltion effects are correct?

I was reading the example about how much money would I pay if I used to pay 6% but then inflation hitted by 20%,, and it seems awfuly weird to me. Now, I not an economist so I don't really know all the formulas but common sense tells me that if I had 100% which are 100$ out of which I pay 6$ interest- an inflation of 20% would mean that now to achieve 100% I need to own 120$- therefore 100 out of 120 is only 83%. So the value of the 6$ I am paying is now instead of 6% only 4.15% of the new whole. So how on earth did you get to 14%???

Alternately 6% out 120 is 7.2.

— Preceding unsigned comment added by 93.172.241.70 (talk) 23:36, 20 March 2012 (UTC) 

Value of the Dollar

Wouldn't it be useful to have on the page a graph showing the change in purchasing power of the dollar over time? This would more visibly demonstrate the actual effect of inflation than the graphs of the change in the inflation rate over time.Classicragger (talk) 19:50, 8 June 2012 (UTC)

Presumably you mean the US dollar? There are lots of currencies, and economies, outside the USA and I'm wary of even more of our econ content becoming USA-centric.

"Purchasing power" is a slightly slippery thing, and any choice there is controversial... bobrayner (talk) 21:11, 8 June 2012 (UTC)

Another theory to explain inflation

Dr Paul Dalziel, in "Money, Credit and Price Stability", proposes a model of the inflationary process that I find very credible. Broadly, it runs as follows:

1. Assume there is no physical currency in circulation. The only medium of exchange is bank balances; people pay other people by transferring "money" from one account to another. This is not too far off the current reality.

2. Businesses finance their capital investment using a combination of bank loans and equity (share) issues, and they have an optimal debt/equity ratio.

3. When a bank advances a loan to a business to finance capital investment, it opens a loan account with a negative balance and a current (checking) account with an offsetting positive balance. The business then uses the balance in this current account to buy capital equipment and/or other stuff, transferring the balance to the accounts of the suppliers of these goods, who are (ultimately) households. This process increases the total amount of "money" in the economy, ie total balances of all households' current accounts.

4. Households are the owners of equities. Most of their liquid wealth is held in the form of equities, but some is held as bank balances ("money") used to facilitate day-to-day transactions. As money is more liquid, but equities pay a better return, households have an optimal money/equity ratio.

5. If businesses' desired debt/equity ratio is higher than households' desired money/equity ratio, then businesses (via their banks) will be putting more "money" into circulation than households want to hold. Households will attempt to dispose of the surplus by buying equities. However, the quantity of equities available to be held by households is fixed, so households cannot (in aggregate) buy more; their attempt to do so will only drive prices up. As the price of equities rises, so (ultimately) will the prices of everything else. The resulting inflation erodes the real value of households' bank balances, so that their money/equity ratio drops to its desired level.

6. The rate of inflation is a function of (1) the difference between the optimal debt/equity and money/equity ratios, and (2) the rate of economic growth. The reason for the latter is that rapid economic growth means that businesses are doing more capital investment, taking out more bank loans, and thereby increasing the supply of "money" more rapidly.

Should this model be included in the Inflation article? — Preceding unsigned comment added by 111.69.251.57 (talk • contribs) 10:48, June 30, 2012‎

The question isn't whether the model is credible (which is your opinion), but whether the source is credible. I don't see evidence of that. — Arthur Rubin (talk) 17:44, 7 August 2012 (UTC)

Well, the source is a published book (ISBN 0415240565) written by a Professor of Economics. How much more credible does it need to be?

Controlling inflation by stimulating growth

This article is missing a subsection under "Controlling inflation" on economic growth. When the economy grows faster than the money supply, that's generally deflationary, so anything that can increase growth will tend to control inflation to some extent. For investments like infrastructure upkeep that return more to the economy than it takes to accomplish them, it's usually straightforward; similarly for education (turning would-be high school dropout taxpayers into college graduate taxpayers), preventative healthcare, etc. I tried to put this into an expanded paragraph at Inflation#Controlling inflation but someone really needs to make it into its own section there. All the other options are sort of Plan B since economic growth usually does a whole lot of other good things. I.e., you only want to tighten credit when you know for sure that the money supply is going to grow faster than the economy; perhaps because of too much borrowing in government fiscal policy. —Cupco 10:59, 18 September 2012 (UTC)

 Added with some references. —Cupco 03:00, 19 September 2012 (UTC)

That would be true if economic growth didn't cause an increase in the money supply. But our fractional reserve banking system allows banks to create money by advancing loans, which they do more often when the economy is growing.

Shoe leather and Menu costs?

Are these troll sentences? — Preceding unsigned comment added by 106.203.45.239 (talk) 09:31, 20 September 2012 (UTC)

No, those are actual costs associated with inflation that some economists try to model. They are particularly severe under hyperinflation such as in Zimbabwe recently, but oddly stimulative in their own right. Feel free to add or request citations; they aren't difficult to find. —Cupco 10:04, 20 September 2012 (UTC)

Inflation is perhaps best explained using RtNmP

Inflation, when you change your observer viewpoint from rock-bottom or stellar heights to neutral mid mode level, is nothing more than a re-calibration onto the mid-mode operating neutral between rock-bottom & stellar high. It is the mean sum-product return to neutral of each and every platform that pertains to that valuation, when you subtract the increment. Lot´s of people have a tendency to multiple that out (Divide that out), however it is not a multiplication process, inflation being an addicion and not a percentage, due succesive depletion & saturation product cycles where that never returns to neutral untill there is a paper devaluation.

• ∑∏(midmode operating point)/N

Terms:

• amplitude return to zero
• amplitude return to neutral
• calibration
• transistor operating point biasing
• small signal model analyses
• waveform
• neutral buoyancy
• push-pull output
• closed loop recirculation systems

Economy is a sum-zero game, and a sum zero game is inherently a small signal onto a neutrally biased operating point.

(ps: don´t start with your eternal internal robotic heckling about original research et all. All you need is a capacity to think through the terms mentioned above). — Preceding unsigned comment added by 201.208.167.177 (talk) 12:18, 20 March 2013 (UTC)

NAIRU

Isn't NAIRU to do with monetarist economics, rather than Keynesian? MFlet1 (talk) 11:22, 30 April 2013 (UTC)

---

It´s solely another statement in regards to supply and drain from supply (drain from inventory), in terms of the standard very misused terms supply and demand. Assuming a stable non-inflationary mode, with sufficient employment to manage the creation of supply, then any addicional employment would create an oversupply. For what is nominal monetarairy circulation, maximum or minimum concave up or down, any deviation to the left or the right of that nominal point, creates inflation, either by adding forms of print, or removing forms of print. Inflation, defacto, creates inflation, which quite a few individuals in any beaurocratic environment have a habit to attempt to neuronally block, within their own minds, or they would hinder their own attempts at promoting a raise in wage for themselves.

In linguistical dialect, nairu is something undesirable, and keynesian is another term for a nescius that wishes to be key, but doesn´t know where exactly the lock is, into which that key would fit. In social interchanges, it is no wonder that a keynesian never looks at the waiste level of his own pants, and very seldom acknowledges his alters, till that door is slammed shut (in his face). A keynesian is considered to be a theological evangelist, very similar to a pour locker, the one presuming themselves to have the key, the other stating defacto that it´s a pour lock.

Have a nice day ;-) — Preceding unsigned comment added by 201.209.8.124 (talk) 19:15, 5 January 2015 (UTC)

Ps: a forgotten notion: If there is full employment, then there are none whom would have the time to loaf, even though they would have two bits. If there are none whom would have the time to loaf, then the supply side of those offering themselves up into employment decrements. In clearer terms, no sex, no future labourers, no requirements for products, therefore in terms of ´what fools belief´, an economic downturn. That last, is quite keynesian and definitely a poor lock in, the whole of society and economics stagnating in it´s own overpopulated refuse.

little change, money supply growth

Hello, i proppose to change the second sentence: "Economists generally believe that high rates of inflation and hyperinflation are caused by an excessive growth of the money supply.[6] However, money supply growth does not necessarily cause inflation." in: "However, money supply growth does not necessarily cause inflation from a more distinguished sight." or "However, money supply growth does not necessarily cause inflation from another point of view." Or something like that, cause the common definition of Inflation doesnt fit with the meaning of the sentence now (in my opinion). I dont know what this sight is intended to be, but when I imagine a pool of comparable units spread over the world and every unit is bound in a certain way with all assets, then i believe any rise of the number of units (along with a constant number of assets) will have the äquivalent effect of inflation. sry my english, greetings from austria --194.118.178.167 (talk) 13:32, 16 January 2014 (UTC)

You can't use arguments from personal incredulity on Wikipedia talk pages. You need to cite sources for your views.--greenrd (talk) 21:11, 5 January 2015 (UTC)

A quicky.

Any of you good folk have IQ´s above 100? I ask, because you do have such a large tendency to use the same terms that you are explaining to explain the term that you are describing and thereby and through fall foul onto a circular definition where poop is poop because it is poop.

[DELETED]

Cheers, may the self referencial loops make you crash & burn. — Preceding unsigned comment added by 201.208.189.225 (talk) 14:58, 1 September 2014 (UTC)

I deleted part of this comment which did not relate to improving this article.--greenrd (talk) 21:11, 5 January 2015 (UTC)

Dr. Diewert's comment on this article

Dr. Diewert has reviewed this Wikipedia page, and provided us with the following comments to improve its quality:

This article looks OK to me.

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Dr. Diewert has published scholarly research which seems to be relevant to this Wikipedia article:

• Reference : Diewert, E. (2014). Alternative Measures of OECD Output Growth and Inflation. Economics working papers erwin_diewert-2014-1, Vancouver School of Economics, revised 20 Feb 2014.

ExpertIdeasBot (talk) 15:03, 4 June 2015 (UTC)

Good to see someone has a sense of humourOptymystic (talk) 09:22, 14 July 2015 (UTC)

Effects on earnings

This article states both that inflation causes a rise in salary, and also a reduction in real wages. it can't be both, which is it? 222.154.79.246 (talk) 11:00, 17 July 2015 (UTC)

Inflation of wages means people earn more, at least in nominal terms. Inflation in other things mean that a fixed income will buy less, which is described as earning less in real terms. Do you think this needs to be clarified in the article? Which section do you think needs changing? Yaris678 (talk) 12:13, 17 July 2015 (UTC)

Right near the start of the article, listed as positive effects, it's stated that "your salary is likely to increase over time due to inflation" however at this point of the article we're still talking about "price level of goods", not "wage inflation"*, so unless nominal salary raises higher than inflation this isn't true. I'm not finding where I saw reduction in real wages mentioned, but this would seem to be a much more realistic outcome of inflation.

*(which I would argue is a seperate topic worthy of at least it's own clearly clarified subheading, since "price level of goods" is what most people talk about when they're talking inflation).222.154.79.246 (talk) 08:11, 18 July 2015 (UTC)

That was in a section on the burden of debt. You are right that it relates to wage inflation. I have added the word "wage". Yaris678 (talk) 12:00, 29 July 2015 (UTC)

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No, that definition is entirely backwards

The first paragraph, and therefore the entire tone of the article is completely backwards: Inflation is not rising prices, rising prices are the effect of inflation. Inflation is an increase in the money supply. This article used to explain this correctly, now it's completely backwards. --Lance W. Haverkamp (talk) 22:43, 13 January 2015 (UTC)

Yet the Bank of England's inflation calculator is specifically concerned with 'how costs of goods and services change over time' i.e. prices and most definitions of inflation take that form, "a general increase in prices and fall in the purchasing value of money" (Google today) — Preceding unsigned comment added by Optymystic (talk • contribs) 08:11, 14 July 2015 (UTC)

1. This page is about a rise in the general price level (Incidentally I believe that to be the truth) 2. inflation is an increase in a currency supply (I hold that to be misleading, though I would accept the two are often associated) 3. Lower down - "Keynesian economics proposes that changes in money supply do not directly affect prices", so it looks as if our first two sentences preclude Keynesian economics.

My view is that, Inflation refers to a rise in the general price level and that only that definition makes sense of the rest of this major article.Optymystic (talk) 08:45, 14 July 2015 (UTC)

Opening sentence "In economics, inflation is an increase in a currency supply relative to the number of people using it."

Second sentence of paragraph 4

"However, money supply growth does not necessarily cause inflation."

Of course it can't cause inflation, because money supply growth is inflation in the opening sentence. This is gibberish! — Preceding unsigned comment added by Optymystic (talk • contribs) 15:28, 14 July 2015 (UTC)

The definition is completely wrong. Inflation - is NOT the rise of price levels! Inflation is when some entity adds huge amount of monetary units into circulation - which in turn CAUSES the falling of the buying power aka, the value of money. Inflation is basically stealing a little bit from everybody to the inflator - compare it to a tax. That is more important knowledge than all the other bs. in the article. AND there is no such thing as delfation - since destroying money is illegal. --Dmitri 152 (talk) 07:56, 19 February 2016 (UTC)

Dr. Razzak's comment on this article

Dr. Razzak has reviewed this Wikipedia page, and provided us with the following comments to improve its quality:

It is a good coverage.

Talking about inflation requires discussing interest rate, money, etc...which the author has done well.

I am unaware of any empirical research on liquidity trap? If it is about the zero lower bound then I suggest that the author talks about this very relevant issue. Today, many central banks have negative interest rate on bank deposit. There a good debate about the efficacy of such policy. Read Lars Svenssion, Patrick Minford among others on the subject. It should lead to a discussion about inflation versus price level targeting.

"...t, keeping nominal interest rates above zero so that central banks can adjust interest rates to stabilize the economy, and reducing unemployment due to nominal wage rigidity.[5]" This is highly questionable. It implies that there is a stable Phillips curve. But the Phillips curve is unstable. Author does not cite Milton Friedman address to the AEA in 1968 is a paper that should be cited "the role of monetary policy."

I would not say "controlling Inflation" I would say "inflation targeting" instead. Incidentally, the correlation between money (money growth) and prices (inflation) break-down under inflation targeting. See W. A. Razzak, Money in the Era of Inflation Targeting, Reserve Bank of New Zealand Discussion Paper, 2001 . http://rbnz.govt.nz/research-and-publications/discussion-papers/2001/dp2001-02-2... I am sure there other papers on this issue but I cannot recall.

The real interest rate is the nominal rate - Expected inflation rather than actual inflation.

One of the common mistakes is to associate the NAIRU with the Natural Rate of Employment. McCallum described the difference in his research. The NAIRU implies that "there is a unique inflation rate" associated with unemployment, which has implications for monetary policy. The Natural Rate, however, is not associated with any inflation rate because the Phillips curve is vertical. With u=u* at the horizontal axis, any inflation rate on the vertical axis is fine. Completely two different concepts.

I have not seen anything about the inflation bias. Big and important issue and highly related to monetary policy, which the author talks about and Kydland and Prescott and Barro and Gordon Time Inconsistency papers for the relation to inflation-unemployment (output) relationship. The point was scattered around the page.

"Stimulating economic growth" section needs further explanations. It is important to cite literature pointing out to the lack of correlation between money and growth and inflation and growth. I am aware that many economists think that targeting low and stable inflation induces growth. I have not seen any credible evidence. In New Zealand, we have successfully maintained low and stable inflation for more than 25 years, but our growth performance is not good at all. Growth is a function of technical progress, factor inputs such as capital and labor, etc. Money is neutral and super neutral. We have lots of evidence for that. I recall Stanly Fischer had a paper showing that only double-digit inflation hampers growth, otherwise the issue is highly controversial.

When talking about money, discuss inside / outside money differences and the relationship to inflation.

When talking about expectations, discuss how to measure expected inflation, such as Moving averages, model - consistent expectations, indexed bonds, etc. A description of the surveys is a good idea. We have a couple important surveys. Michigan and Philadelphia fed.

Best

We hope Wikipedians on this talk page can take advantage of these comments and improve the quality of the article accordingly.

Dr. Razzak has published scholarly research which seems to be relevant to this Wikipedia article:

• Reference 1: W A Razzak, “Monetary Policy and Forecasting of Inflation with and without the Output Gap.” Discussion Paper 2002/03, Reserve Bank of New Zealand (2002).

• Reference 2: W A Razzak, Money in the Era of Inflation Targeting.” Working Paper 2000/2, Reserve Bank of New Zealand (2000).

• Reference 3: W A razzak, “Wage, Productivity, and Unemployment: Microeconomics Theory and Macroeconomics Data,” Applied Economics, Vol. 47, Issue 58, 2015.

• Reference 4: W A Razzak, "Is the Taylor Rule Really Different from the McCallum Rule?" Contemporary Economic Policy, Volume 21, Number 4, October 2003, 445.

• Reference 5: W. A. Razzak (with David Mayes), “Transparency and Accountability: Empirical Models and Policy Making in the Reserve Bank of New Zealand,” Economic Modelling 15 (1998), 377-394.

• Reference 6: W A Razzak, Wage-Price Dynamics, the Labour Market and Deflation in Hong Kong. Working Paper 242003, HKIMR, (2003).

ExpertIdeasBot (talk) 16:21, 19 May 2016 (UTC)

Dr. Staehr's comment on this article

Dr. Staehr has reviewed this Wikipedia page, and provided us with the following comments to improve its quality:

I think the article is overall OK, but it could be improved if it were organised somewhat differently, a slightly more academic approach were adopted and the introduction were improved.

ORGANISATION

I find it strange that the "History" comes before "Related definitions" and "Measures". Perhaps the history should be put into an individual article? I believe the discussion in the history should be improved. Why is there no discussion after the hyperinflation in Germany?

ACADEMICS

I think the "Causes section" could be extended a bit, in particular the part pertaining to "Rational expectations theory". The specific branch, monetary policy games, should be mentioned and the discussion of the (time)inconsistency of low inflation should be clearly spelled out. In the part on "Controlling inflation", there should be a short discussion of inflation targeting and a link to the article on this key monetary policy. I don't understand why the "Gold standard" is included in the part on "Controlling inflation"; the gold standard is a specific form of a fixed exchange rate regime and is of little interest nowadays.

INTRODUCTION

In the first paragraph "inflation can refer to either an increase in the money supply or" I would remove "either an increase in the money supply or". I would also removed the last part of the paragraph ", normally owing to an increase in the money supply" since the causes of inflation are highly disputed and increased money supply has very weak predictive power in the short term.

I am for the same reason skeptical to the next paragraph starting with "When the money supply rises" since money growth is at most one explanation. The words "When the money supply rises, so does the price level, whether of assets, commodities or consumer goods, as each unit of currency buys fewer goods and services. Consequently," could be deleted.

The first figure (USA inflation) could be updated.

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• Reference : Karsten Staehr, 2010. "Inflation in the New EU Countries from Central and Eastern Europe : Theories and panel data estimations," Bank of Estonia Working Papers wp2010-06, Bank of Estonia, revised 26 May 2010.

ExpertIdeasBot (talk) 12:56, 7 June 2016 (UTC)

Dr. Nautz's comment on this article

Dr. Nautz has reviewed this Wikipedia page, and provided us with the following comments to improve its quality:

There are no main mistakes in the article. My impression is, however, that the readability of the article could be improved. Currently, too many side-aspects of inflation are covered (inflation and the revolution in egypt, historical debates that are only interesting for economists that, however are not expected to use wikipedia for learing about inflation).

I would recommend to shift the emphasis on the basics which should be more interesting for the typical user of wikipedia:

definition of inflation, some historical examples, measurement issues, costs and benefits of inflation, role of inflation for monetary policy.

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Dr. Nautz has published scholarly research which seems to be relevant to this Wikipedia article:

• Reference : Becker, Sascha & Nautz, Dieter, 2010. "Inflation, price dispersion and market integration through the lens of a monetary search model," Discussion Papers 2010/2, Free University Berlin, School of Business & Economics.

ExpertIdeasBot (talk) 09:19, 16 June 2016 (UTC)

Dr. Faig's comment on this article

Dr. Faig has reviewed this Wikipedia page, and provided us with the following comments to improve its quality:

This is a very good summary of the consensus view by economists on this subject. The only suggestion I can think off is the following: Remove the last sentence in the second paragraph in "History" (the one starting with "Demographic factors...") It does not make any sense because economic growth tends to reduce inflation. Who ever put it must have confused some relative price such as price of land relative to labour instead of the general price level.

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Dr. Faig has published scholarly research which seems to be relevant to this Wikipedia article:

• Reference : Miquel Faig & Belen Jerez, 2006. "Inflation, Prices, and Information in Competitive Search," Working Papers tecipa-215, University of Toronto, Department of Economics.

ExpertIdeasBot (talk) 15:09, 24 June 2016 (UTC)

Dr. Robinson's comment on this article

Dr. Robinson has reviewed this Wikipedia page, and provided us with the following comments to improve its quality:

(1)

Core price indices: because food and oil prices can change quickly due to changes in supply and demand conditions in the food and oil markets, it can be difficult to detect the long run trend in price levels when those prices are included. Therefore, most statistical agencies also report a measure of 'core inflation', which removes the most volatile components (such as food and oil) from a broad price index like the CPI. Because core inflation is less affected by short run supply and demand conditions in specific markets, central banks rely on it to better measure the inflationary impact of current monetary policy.

Comment: There are measures of core inflation other than excluding volatile items, such as the trimmed-mean or weighted-median CPI. These receive considerable attention in some countries in the setting of monetary policy, such as Australia. Also the motivation of looking at core inflation at some central banks is that it provides a better guide of underlying inflationary pressures which are likely to persist in the future.

(2)

In the common measures of inflation the PCE deflator could be mentioned, as the U.S. Federal Reserve focuses on it.

(3) Some Keynesian economists also disagree with the notion that central banks fully control the money supply, arguing that central banks have little control, since the money supply adapts to the demand for bank credit issued by commercial banks. This is known as the theory of endogenous money, and has been advocated strongly by post-Keynesians as far back as the 1960s. It has today become a central focus of Taylor rule advocates. This position is not universally accepted – banks create money by making loans, but the aggregate volume of these loans diminishes as real interest rates increase. Thus, central banks can influence the money supply by making money cheaper or more expensive, thus increasing or decreasing its production.

Comment: Stating that endogenous money is a central focus of Taylor rule advocates seems tenuous. A lot of people use a Taylor rule as a simple summary of how monetary policy is set, rather than reflecting a view on the nature money.

(4) However, one problem with this theory for policy-making purposes is that the exact level of potential output (and of the NAIRU) is generally unknown and tends to change over time. Inflation also seems to act in an asymmetric way, rising more quickly than it falls. Worse, it can change because of policy: for example, high unemployment under British Prime Minister Margaret Thatcher might have led to a rise in the NAIRU (and a fall in potential) because many of the unemployed found themselves as structurally unemployed (also see unemployment), unable to find jobs that fit their skills. A rise in structural unemployment implies that a smaller percentage of the labor force can find jobs at the NAIRU, where the economy avoids crossing the threshold into the realm of accelerating inflation.

Comment: Is there a reference to a paper quantifying the extent of hysteresis that occurred during the Thatcher period to support this example?

(5) Rational expectations theory This could be replaced by a discussion of the New Keynesian Phillips Curve (e.g. Gali and Gertler, Journal of Monetary Economics, 1999) and criticisms of it (e.g. Rudd and Whelan, AER, 2006).

(6) Monetary Policy Section

The discussion could also link to the potential for inflationary bias as a rationale for central bank independence.

We hope Wikipedians on this talk page can take advantage of these comments and improve the quality of the article accordingly.

We believe Dr. Robinson has expertise on the topic of this article, since he has published relevant scholarly research:

• Reference : Adam Cagliarini & Tim Robinson & Allen Tran, 2010. "Reconciling Microeconomic and Macroeconomic Estimates of Price Stickiness," RBA Research Discussion Papers rdp2010-01, Reserve Bank of Australia.

ExpertIdeasBot (talk) 16:45, 2 August 2016 (UTC)

Biflation

The former article on "biflation" has been deleted and the term now redirects to this page. However, nowhere on this page is biflation discussed or defined. It can be defined as simultaneous price inflation in some asset classes and price deflation in others. Whether such a condition is a valid economic term of art or not may be a matter for debate but as long as "biflation" redirects here it should at least be mentioned in this article.

Current Wikipedia article in French: https://fr.wikipedia.org/wiki/Biflation Old Wikipedia article in English: https://en.wikipedia.org/wiki/Biflation?oldid=423495886

Further information: http://www.investopedia.com/terms/b/biflation.asp https://inflationdata.com/articles/2013/04/04/biflation/ — Preceding unsigned comment added by 216.246.144.16 (talk) 02:30, 28 March 2017 (UTC)

Undoubtedly "biflation" should be a separate article, and not redirected to this one. An editor believes that the term is somehow original research, which it is not. SethWhales ^talk 06:49, 28 March 2017 (UTC)

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Measurement and reporting of inflation

Regarding this edit

Despite a daily CPI being available for TIPS, this article is about inflation, not CPI or TIPS, and inflation is measured and reported monthly on an annualized basis.

That’s why I reverted the edit, and I now seek consensus for the edit to be reverted again. soibangla (talk) 18:48, 17 December 2018 (UTC)

This article is about inflation." What is inflation? Inflation is the change in the general price level above zero More than 120 countries issue INFLATION-linked sovereign bonds. What is an inflation linked sovereign bond? It is a bond issued by a sovereign - a country - linked to inflation. ALL sovereign INFLATION-linked bonds - trillions of USD globally - are priced daily in terms of the Daily CPI values calculated and published by these 120 plus countries. In the past - before inflation-linked bonds - inflation was measured and reported monthly. As of the first moment of the first inflation-linked sovereign bond - either UK or US - many, many decades ago inflation was started to be reported Daily. Today this happens in 120 plus countries issueing inflation-linked bonds. Why? Because the general price level changes at least daily. How can you show an example of it? Go to any hyperinflationary economy. The prices change - at least daily. Everyone knows that in a hyperinflationary economy. No-one knows that in a low inflationary economy - for example you. When you have to link something of massive value to inflation and trade it in the global financial markets where these inflation-linked bonds are traded daily, you need to admit that the general price level changes daily in every economy in the world - hence you find Daily CPIs published by every country that issues inflation-linked bonds. Simply put: inflation is calculated and reported daily since the introduction of sovereign inflation-linked bonds many decades ago. You will find published Daily CPIs for more than 120 countries which represent 99.9% of the global economy. You want to argue against 99.9% OFFICIAL PUBLICATION of the Daily CPI in the world economy in 120 plus countries? WOT :-) — Preceding unsigned comment added by 46.189.233.85 (talk) 00:18, 18 December 2018 (UTC)

I agree that this edit should be undone. Yes prices change daily. So what? Daily CPI is not the same as inflation. No idea what point the IP is trying to make with the blather about deflation and humans being unable to comprehend it.This claim has been undone twice now, by different editors. I'm removing it again. Unless a consensus is reached here to include it it should stay out.,Meters (talk)

And now undone 5 times by 4 different editors. IP, either discuss this or leave it alone. This will be at the edit warring board otherwise. Meters (talk) 22:12, 18 December 2018 (UTC)

The IP is now couching the edit in terms of daily CPIs, but it's clear from the edit summary "Or do you want to state again that the Daily CPI and inflation is not the same ... " here that the intention is still to claim that inflation rates are calculated daily. Meters (talk) 23:20, 18 December 2018 (UTC)

IP, either discuss this or leave it alone. :-)

You don´t discuss. You are at war. Enjoy killing this "discussion". I am a person of peace. I don´t belong here. Bye, bye. — Preceding unsigned comment added by 46.189.233.85 (talk) 08:56, 22 December 2018 (UTC)

Inflation charts

@Lawrencekhoo: I suggest this edit provides a chart that is inferior to the one it replaced, because...

1) it does not show the source for the data; 2) it does not show which deflator was used (CPI, PCE etc); 3) it ends in 2010, while the other chart ended in 2018; 4) it generally doesn't look as professional as the FRED chart it replaced

The chart in this edit purports to show inflation/deflation back to the 17th century, but does not provide a source for that data, and data that far back is of highly dubious reliability. Cheers.soibangla (talk) 19:27, 3 February 2019 (UTC)

I would respectfully disagree. First, the original chart from Fred is a direct download of their displayed chart and includes their branding. This is not appropriate for the lead image. Second, the source for the data for the two other charts are noted on their pages on wiki media.As noted on that page, the source for the lead image is also from Fred. The original Fred chart uses a much shorter series, and does not give a good idea of what the experience of inflation has been in the modern era. If your main objection is that the current lead image ends in 2010, I can update it and upload a newer chart. --LK (talk) 03:33, 4 February 2019 (UTC)

The chart has been updated to the latest available data. 183.178.187.191 (talk) 19:10, 4 February 2019 (UTC)

Offline references

Just scanning the lede, I see that many/most of the references are to textbooks that cannot actually be accessed by readers. I have to question the value of such refs, especially since some of the assertions being made in the article are quite sweeping and perhaps subject to challenge. Is there a better way we can do this? soibangla (talk) 22:40, 5 April 2019 (UTC)

Business studies

What are joint ventures Lebogang Hadebe (talk) 15:32, 30 March 2020 (UTC)

Economics

Opportunity cost and basic economic questions Lebogang Hadebe (talk) 15:36, 30 March 2020 (UTC)

Psychological aspects are missing

New empirical research shows that the relationship between the amount of money and confidence in a currency is primarily based on the fact that the confidence of market participants in the assets of the central bank plays the decisive role. The influence of the central bank’s assets on the exchange rate and the price level: essays and empirical analyses — Preceding unsigned comment added by 2A0A:A543:24EF:0:1973:64C7:7F71:9319 (talk) 16:53, 15 January 2021 (UTC)

Hyperinflation harm is not an opinable or debated matter

Second paragraph starts: "Economists believe that very high rates of inflation and hyperinflation are harmful, and are caused by excessive growth of the money supply.[8] ". First time in my life that I see hyperinflation harm is possibly matter of discussion or something "Economists believe". The wikipedia entry about hyperinflation shows ample evidence about its consequences that vary from "harmful" to a total collapse of the economy, without a single case in history of hyperinflation or high inflation being benign, so after reading it and going back to re-read the second paragraph I am even more puzzled. Wouldn't suit better: "Very high rates of inflation and hyperinflation are harmful, and Economists believe that are caused by excessive growth of the money supply.[8] "? I even think that the "and Economists believe that are caused by excessive growth of the money supply." could be replaced with "and most Economists agree that are caused by excessive growth of the money supply.", but could be just my opinion. What I find misleading is the inclusion of the harmful effect as part of the Economist belief or agreement or whatever yo might name it. How does it sound today: "Doctors believe that lung cancer is harmful, and... "? Regards Francisco Fernandez Rodriguez (talk) 01:24, 16 July 2021 (UTC)

Inflation not the same as price inflation

It seems to me that the lead para is confused. By inflation it generally means ‘simultaneous increase in prices and wages (and other forms of income)’, which justifies the statement that ‘most economists favour a low and steady rate of inflation’. However it also says that inflation is usually measured by the consumer price index, ignoring the possibility that wages and prices may move separately. I would call the latter effect ‘price inflation’. I don’t think most economists would favour a continued increase in prices while wages stayed fixed.

I don’t have reliable sources to support any changes, but would like the article to say something defensible. Colin.champion (talk) 09:55, 19 October 2021 (UTC)

Perhaps I should explain why I was drawn to this. On the day I posted, the Resolution Foundation (‘a leading thinktank’ in the UK) had published a report in which it said:

Higher inflation reduces the amount of goods and services that households are able to afford, eroding the real value of incomes.

Obviously this is poppycock (and one doesn’t expect anything better from a ‘leading thinktank’), but one expects Wikipedia to set it right. See The Guardian. Colin.champion (talk) 16:24, 26 October 2021 (UTC)

Good catch. Do you have a reliable source that spells out the point you just made? If so this change should garner no objection. Generalrelative (talk) 17:07, 26 October 2021 (UTC)

A quick search yielded this from the Federal Reserve Bank of Cleveland: [8]. I imagine that should be sufficient. @Colin.champion: I don't have time to make this change myself but I'd encourage you to do so. With thanks, Generalrelative (talk) 17:12, 26 October 2021 (UTC)

Obviously this is poppycock No it isn't. soibangla (talk) 17:14, 26 October 2021 (UTC)

Aha, I spoke too soon regarding "no objections". To clarify: it is not technically wrong to equate inflation with price inflation so long as one remembers that wages = the price of labor, thus any increase in the price of labor equals an increase in the purchasing power of households. But the price of labor is notoriously "sticky", which is why rapid inflation tends to negatively affect the purchasing power of households. This is all macro 101. See e.g. this from the IMF: [9]. The statement Higher inflation reduces the amount of goods and services that households are able to afford, eroding the real value of incomes is thus not ass-backwards, but the point could be stated far more precisely. And that imprecision matters. It is misleading insofar as it implies that a target of zero inflation would be optimal. The essential point that Colin.champion is making is sound. Generalrelative (talk) 17:23, 26 October 2021 (UTC)

I disagree that The essential point Colin.champion is making is sound. The premise of By inflation it generally means ‘simultaneous increase in prices and wages (and other forms of income)’, which justifies the statement that ‘most economists favour a low and steady rate of inflation’ is deeply flawed. If wage increases matched price increases, no one would have any concerns about inflation. But they do when wages don't keep pace with prices. That's what the concerns about inflation are all about. soibangla (talk) 17:34, 26 October 2021 (UTC)

Not to quibble but If wage increases matched price increases, no one would have any concerns about inflation is wrong. Lenders (i.e. banks and those who have invested in debt instruments) would still have a major problem with it. What it would do, though, is remove the "we're just looking out for households" rhetorical tactic that inflation hawks use to obscure the fact that they're primarily interested in protecting lenders. That last clause of course is opinion, but the rest is uncontroversial. Generalrelative (talk) 19:59, 26 October 2021 (UTC)

The reason a low and steady inflation rate is desirable is because it creates a measure of beneficial "demand pull" and provides a cushion against falling into ruinous deflation. soibangla (talk) 17:38, 26 October 2021 (UTC)

We don't disagree in principle. The problem is with an imprecision in language which can lead to erroneous conclusions. In this case, parsing clearly the different uses of the term "inflation" (as, by the way, both of the sources I linked to above do) would improve this article. That's what I take to be Colin.champion's essential point. Generalrelative (talk) 17:40, 26 October 2021 (UTC)

I think some really solid sourcing that explicitly makes this argument is needed to move on this proposal. soibangla (talk) 17:46, 26 October 2021 (UTC)

I agree, which is why I suggested it above. Here's a statement from a clearly RS secondary source (The Great Inflation: The Rebirth of Modern Central Banking by Athanasios Orphanides and Michael D. Bordo, published by University of Chicago Press in 2013 [10]): When we talk about inflation, or changes in the general price level, we are, in principle, envisioning a uniform percentage increase in prices and wages . . . . (p. 56) That's what I can read in snippet view and would have to get the book from the library in order to provide more, but it's proof of principle that Colin.champion's starting premise is accurate. I suggest that they or anyone else who has the time and interest check out this book as a possible source. Generalrelative (talk) 18:33, 26 October 2021 (UTC)

I think there’s a persistent lack of clarity when people write about this. soibangla’s statement (as rejected by Generalrelative) is certainly incorrect: inflation may have significant effects even when wages are locked to prices. For instance Axel Leijonhufvud stated that “the market system does not work in the same way during high inflations as in normal times” (interview with Snowdon). Unfortunately I don’t have any good resources to support an authoratitive definition. The New Palgrave is the obvious place to look. I don’t have access, but Google Books is willing to let me see a bit of it. It clearly assumes that inflation is simultaneous movement of wages and prices. For instance it says that “Measures of inflation in earlier periods are based on fragmentary samples of prcies, such as those of corn... or of labour”. But it never makes the point explicitly, and doesn’t say how inflation is defined when retail prices are moving at a different speed from wages. It occasionally uses the term ‘price’ in a sense which seems to exclude wages – see the section on ‘Anticipated inflation’ which contains the odd claim that x% price inflation “makes wages increase x per cent faster”. I drafted the following yesterday, but if the topic is controversial, it might not be acceptable.

soibangla’s statement (as rejected by Generalrelative) is certainly incorrect Perhaps I should have made clear that I was speaking in macro terms rather than sector terms (Generalrelative referred specifically to the lending/debt sector), much in the same way inflation is defined as the general price level rather than in selected sectors. I think there’s a persistent lack of clarity when people write about this...Unfortunately I don’t have any good resources to support an authoratitive definition which explains why I objected to your assertion that Obviously this is poppycock and so far you haven't produced persuasive evidence of that. I drafted the following yesterday, but if the topic is controversial, it might not be acceptable. The fact this article has existed for many years without including what you now propose without sources to support it would tend to suggest that, yes.soibangla (talk) 16:43, 27 October 2021 (UTC)

possible new text

In economics, inflation refers to a simultaneous progressive increase in all prices (including wages) in an economy. When the general price level rises, each unit of currency buys fewer goods and services; consequently, inflation reflects a reduction in the purchasing power of money. The opposite of inflation is deflation, a sustained decrease in the general price level of goods and services. The common measure of inflation is the inflation rate, the annualised percentage change in a general price index. In practice prices will not all move together. Attaching a representative value to a set of prices is an instance of the index number problem. The consumer price index is often used for this purpose; the employment cost index is used for wages in America. Differential movement between consumer prices and wages consistutes a change in the standard of living. When such a difference is present, there is no agreed definition of where the inflation rate lies between the two values. Very high inflation and hyperinflation cause severe disruption; more moderate inflation affects economies in both positive and negative ways. The negative effects include an increase in the opportunity cost of holding money, uncertainty over future inflation which may discourage investment and savings, and if inflation were rapid enough, shortages of goods as consumers begin hoarding out of concern that prices will increase in the future. Positive effects include reducing unemployment due to nominal wage rigidity, allowing the central bank greater freedom in carrying out monetary policy, encouraging loans and investment instead of money hoarding, and avoiding the inefficiencies associated with deflation. ... Definition The term “inflation” refers to the general price level. Changes in retail prices may be described as “price inflation”, changes to the wage level as “wage inflation”, and changes to the money supply as monetary inflation. These terms are sometimes assumed to identify the causative factor. More specific forms of inflation are discussed for sectors whose prices vary semi-independently from the general trend. “House price inflation” refers to changes in the house price index; “energy inflation” is dominated by the costs of oil and gas. References

Colin.champion (talk) 13:40, 27 October 2021 (UTC)

Here’s an unambiguous statement in a reliable source:

Why then does fully anticipated inflation impose any costs? The prices you pay for groceries, movie tickets, and other goods would increase by 4% per year but so would your nominal wage or the nominal value of the goods or services you produce. Because your nominal income is rising, along with prices, your purchasing power isn’t hurt by the perfectly anticipated inflation.

This is part of a discussion of the difference in effect between anticipated and unanticipated inflation. “Macroeconomics” by Abel and Bernanke, fifth edition (2005) consulted, p456. Colin.champion (talk) 07:28, 28 October 2021 (UTC)

I’ve added some words to make it explicit that wages are included in the price system. Some minor changes were needed for consistency and to ensure that the presentation flows naturally; I’ve tried to stay faithful to the general approach. Colin.champion (talk) 08:39, 29 October 2021 (UTC)

May I suggest a more radical re-wording? "Inflation is a sustained continuous fall in the value of money." I have a source somewhere, for that or something very close to it, but not immediately to hand. Philip Trueman (talk) 17:10, 3 November 2021 (UTC)

I don't think you understand that you are citing a textbook in which various "perfect" conditions are assumed to illustrate concepts. Ceteris paribus and such. But here in the real world, perfect conditions are uncommon if not rare, such as instantaneous reaction of wages to price increases. soibangla (talk) 18:15, 3 November 2021 (UTC)

I have reinstated the words “including prices”. I had the civility to discuss the matter here before making my change, and another editor seemed to be in agreement subject to the provision of a supporting reference. Soibangla’s mention of “one editor” is therefore incorrect. Abel and Bernanke are fully capable of understanding the non-instantaneous nature of price reactions. The reason most sources don’t specifically mention wages is that they are written for people who know enough to take the fact for granted. The relationship of inflation to the quantity of money makes it impossible to view inflation in terms of differential motion. Likewise the statement that “inflation is a monetary phenomenon” would make no sense if it moved prices apart from wages. It is noticeable that Abel and Bernanke discuss inflation at several points, introducing it in pp6-8 in terms which make no explicit reference to wages. When they get to p456 they assume that the reader is convinced that wages are part of inflation (the first time they mention the fact) in order to answer the suspicion that inflation may therefore be harmless.

In response to Ehrenkater’s edit, it is true that not all prices need to rise, but inflation refers to a sort of average. Stock market prices are part of the general price system and will tend to move along with inflation, though, like house prices, they have a significant degree of independence. However the edit was perfectly sound and probably added to clarity. Colin.champion (talk) 09:52, 4 November 2021 (UTC)

Incidentally, if anyone asks what is the right way to average prices when identifying the inflation rate, the answer (if you accept the Quantity Theory) is that P is that average which is consistent with the equation MV=PQ. If an average was defined with a zero weight for wages or for stocks, then it would be inconsistent with this equation because it would imply that an increase in the level of wage payments or of stock transactions would not require any extra circulating money, and this is contrary to the case. Colin.champion (talk) 10:49, 4 November 2021 (UTC)

Colin.champion, I strongly disagree with your approach. I see on your profile page that you conduct a lot or original research, which is cool. But you're then drawing your own conclusions and making a very significant change to the definition of inflation which has been nearly-universally accepted and static on this page since forever. That's a radical change that needs to be solidly sourced from numerous reliable sources, not thinly sourced with cherrypicked sources you found through your original research. Extraordinary claims require extraordinary sources. You even assert to know what Abel and Bernanke were thinking, and make presumptive leaps to support your position with The reason most sources don’t specifically mention wages is that they are written for people who know enough to take the fact for granted. Wow. Your major change to the definition is simply not supported by the nearly-universal body of economists, and if it were it would be broadly and conspicuously available, but it clearly is not. Also, I note you used another Wikipedia article as one of your two references, and the Abel/Bernanke source cannot be verified, especially not in its full context. I'm going to remove it again, and as I see it you have two options: 1) open an RfC, or 2) drop it. soibangla (talk) 14:14, 4 November 2021 (UTC)

Definition change suggestion: The increase in prices is the consequence of inflation. The cause of this is the loss of value of the currency, which is the definition of Inflation. The cause of Inflation is much discussed but the consensus is that it's caused by growth in the money supply.

I suggest an edition to the main, first two sentences of the article, so that it mentions the actual definition clearly, and not just the consequence followed by an evasive explanation of what it "corresponds" to. I suggest to use the definition of Inflation provided by the French National Institute of Statistics and Economic Studies (INSEE), or something very similar like: Inflation is the loss of value or purchasing power of the currency which results in a general and lasting increase in prices. Purchasing power of a currency = value of a currency The 3 existing sources shall be kept if need be. The INSEE is a source with a lot of weight. The INSEE directs many aspects of the economy of France which is a significant economy.

Please do not ignore this comment or someone take the action of adding this information to the Inflation page clearly (I emphasize the need to detail the definition of inflation in the very first sentence). This is important because English is the main "common" language and the definition of inflation should not only reflect what the US thinks. It shall be neutral. It shall therefore not only include the consequence, but the actual definition, as only keeping one aspect reflects a biased view of reality, and this article is too important for that to happen. This shall be continuously monitored. GeorgesDupond (talk) 15:18, 5 November 2021 (UTC)

GeorgesDupond: What you propose, if I understand you correctly, is right there in sentence #2 of the lead: inflation corresponds to a reduction in the purchasing power of money. If you would like to say "inflation corresponds to a reduction in the value of currency and thus its purchasing power," that would be fine, if not a bit redundant. But I think this matter is being overthought and made more complicated than necessary. Keep the lead simple as it is, and consider elaborating on finer points in the body, especially heterodox views. soibangla (talk) 01:12, 6 November 2021 (UTC)

I'm really sorry, but this is not what I've proposed. Please read me again for now as I don't have much time to detail. but I explained 1) what part do I suggest to change 2) which phrase to use instead in bold 3) reasons why it shall be changed 4) this is not about "Purchasing power of a currency = value of a currency" which is a detail that I had to mention in the context of my main suggestion. tldr: The first sentences of this article are biased and doesn't reflect what inflation actually is, and the first sentences shall reflect that because readers might just read the first few sentences and carry on with that incomplete info. The right sentence should be : In economics, inflation is the loss of value or purchasing power of a currency which results in a general and lasting increase in prices. or In economics, inflation is the loss of value of a currency which results in a general and lasting increase in prices. When the general price level rises, each unit of currency buys fewer goods and services; consequently, inflation corresponds to a reduction in the purchasing power of money. The shorter, the better. This first proposition is clear. The second is also clear, more redundant, but explains more in case some persons might not understand the first sentence. The first sentence must explain what "is" inflation not what it "refers" to. My source is the INSEE and the sources already existing in the article. GeorgesDupond (talk) 12:17, 6 November 2021 (UTC)

GeorgesDupond: Given the four very high quality sources which flatly state...

• "inflation is ongoing increases in the general price level for goods and services in an economy over time" and
• "Inflation can be defined as the overall general upward price movement of goods and services in an economy" and
• "inflation refers to changes over time in the overall level of prices of goods and services throughout the economy" and
• "Inflation is the increase in the prices of goods and services over time"

...I don't agree with your assertion The first sentences of this article are biased and doesn't reflect what inflation actually is and I think the long-standing sentence should remain unchanged and I don't agree the first sentences shall reflect your proposal. What do others think? soibangla (talk) 14:46, 6 November 2021 (UTC)

Needs the opinion of multiple other persons of different economical backgrounds. Please mention your economical school of thought when replying. This first sentence of the article is currently biased in my opinion and shall be neutral instead. So it seems to me the debate is about determining if: 1. The loss of value of a currency results in an increase in the prices, or 2. The increase in prices results in the loss of value of a currency. Currently the article leads people to think 2. is the truth. I think 1. is true based on what the INSEE says. Critical thinking also leads me to think 1. is true, because growth of the money supply impacts the value of the currency, before impacting the value of the prices, because prices are measured by the unit of account, which is the currency, and it's the currency which dictates the prices, not the contrary. As such statement 1. is true and the "four very high quality sources" might not be as precise as the article requires. 1 single source can outweight 4 sources in some cases, and this is one of those. I also note that those 4 sources are American. So there is only 1 source country, the USA. It's USA vs France in that regard. I'm calling bias on this one and I believe I've given many reasons to believe so in my last messages. Needs opinions of other users. GeorgesDupond (talk) 15:17, 6 November 2021 (UTC)

GeorgesDupond: European Central Bank:[11]

• 1) "Inflation occurs if there is a broad increase in the prices of goods and services"
  • What our article says: 1) "inflation refers to a general progressive increase in prices of goods and services in an economy."
• 2) "it means, you can buy less for €1 today than you could yesterday"
  • What our article says: 2) "When the general price level rises, each unit of currency buys fewer goods and services"
• 3) "In other words, inflation reduces the value of the currency over time."
  • What our article says: 3) "inflation corresponds to a reduction in the purchasing power of money"

soibangla (talk) 16:18, 6 November 2021 (UTC)

The central bank which is tasked to manage the currency has interests into letting people think that the inflation is tied to the prices increase, instead of the loss of value of the currency which they are directly responsible of, which redirects the blame of such actions elsewhere. This isn't a good source, a good source shall be an independant and credible economical source such as the INSEE. INSEE which doesn't tell exactly the same thing as the central bank, so important conclusions shall be drawn from this fact. The bias argument still stands. This last message shall be in consequence disregarded and the discussion continued from my last message from 15:17. GeorgesDupond (talk) 17:38, 6 November 2021 (UTC)

lol. whatever. soibangla (talk) 17:43, 6 November 2021 (UTC)

Please, contribute seriously. This is an important subject. I've given plenty of rational reasons to edit the two first sentences. I'm interested in the opinions of others before editing so I'll wait a little while, but in the absence of activity in the following weeks/months I'll go ahead and update the article, and will persist in doing so if an edition war occurs, based on this very discussion we had and the sources provided. GeorgesDupond (talk) 17:48, 6 November 2021 (UTC)

GeorgesDupond: You have absolutely nothing close to a consensus to make such a change. You created your account just yesterday and burst into this article with an aggressive tone that your view shall prevail here. I strongly advise you to slow down and hear what others say before before changing the lead. soibangla (talk) 17:53, 6 November 2021 (UTC)

--Yes, I created an account to have a discussion here since others edits I did didn't required discussions. I'm sorry if you felt my tone was aggressive, this isn't at all my intent. Please accept my apologies if that's the case, English isn't my main language. But the subject is very important. The tone or the date of creation of my account has nothing to do with what is true or not; only rational reasonings matter, which I believe I've provided and aren't at this time proven wrong. You're talking about a consensus but why does the INSEE, which unlike the central bank isn't involved in monetary creation, tells something different? Understand that such subjects are politically charged, and it seems that wikipedia is known for having problems with some political articles, as some persons have personal agenda they're trying to push, which is to be expected. It's therefore a difficult task for the editors to maintain articles that are as neutral as possible. A consensus isn't like an absolute truth. A consensus can evolve, and shall evolve, if the consensus is challenged and rational reasons are provided to think differently. This article should take this into account, and I believe I've brought a neutral explanation to Inflation which is important. I won't change anything before waiting long enough and I'm hoping to see the views of other persons by then, yes. I'm also willing to change my views if my arguments and the INSEE are proven wrong. GeorgesDupond (talk) 18:59, 6 November 2021 (UTC)

World Bank:"Inflation refers to a sustained and broad-based increase

in the overall price level."[12]

IMF concurs: "Inflation is the rate of increase in prices over a given period of time."[13]]

Neither of those bodies are involved in monetary policy.

The overwhelming preponderance of the very high quality sources I have provided dwarfs the INSEE source you have provided. The top line sentence should succinctly encapsulate that, and as I said before: Keep the lead simple as it is, and consider elaborating on finer points in the body, especially heterodox views. and that would include discussions of whether central banks systematically debase the values of currencies as the underlying cause of inflation. Some argue that inflation "didn't exist" before the Fed was created in 1913, to conclude that central banks cause inflation and should be abolished, but they don't understand that CPI was effectively created in 1913 to enable inflation to be measured adequately so the Fed could do their job, so that's why inflation "began" when the Fed began. And CPI is calculated by the BLS, not the Fed. PCEPI[14] is calculated by the BEA, not the Fed. I will pause to allow others to contribute, but I encourage you to not interpret silence of others as a green light to proceed with your changes, because I will intervene if you do. some persons have personal agenda they're trying to push. Yup. Get consensus. soibangla (talk) 20:35, 6 November 2021 (UTC)

So, for whatever purpose, the IMF has taken upon itself to redefine inflation...or perhaps it doesn't understand inflation...or maybe it's confusing finance with economics. Religion and politics intentionally re-define terms so people using those terms can no longer effectively communicate, but they can also be unintentionally redefined by repeated misuse. Arguing about a term without first agreeing on its definition, or about something that can be described mathematically, accomplishes nothing.

The article is pretty good, but as with any subject, references and consensus don't replace proper logic applied to reproducible observation and knowledge. Some folks above also don't recognize a difference between cause (inflation has many) and effect (decrease in purchasing power of currency) and effect of effect (prices increase, not costs or values), etc.

The article should probably mention somewhere that when inflation decreases purchasing power, the amount lost does not disappear. Without the permission and often without the knowledge of the holder of the currency, the purchasing power is transferred elsewhere (e.g., to the government, monopoly, etc., that "caused" the inflation). So technically, inflation is an intentional, surreptitious transfer of value, in other contexts known as theft. The article might also point out that no inflation (or theft) is healthy (e.g., at the current ideal rate of 2% inflation, in 2950 a 1¢ stick of 1950s gum will have a price of almost $4 million). 70.161.18.166 (talk) 15:44, 7 December 2021 (UTC)

I encourage you to present reliable sources that assert inflation is an intentional, surreptitious transfer of value, in other contexts known as theft soibangla (talk) 15:48, 7 December 2021 (UTC)

I hope you're kidding...or do you need reliable sources confirming that:

• politicians print money that is not backed by production of goods and services, to pay for things voters demand without increased taxes, rather than telling voters they must pay for government services;
• companies create monopolies and/or abuse the patent system and/or collude with others in their industry, so they can charge more without delivering more;
• etc...

...all of which are causes of inflation and are intentional and/or surreptitious?

70.161.18.166 (talk) 20:28, 11 December 2021 (UTC)

Without going that far, I support specially the idea of inflation having a consequence on the wealth distribution . I find interesting that inflation isn't even mentioned once in the Economic_inequality article. Also it's interesting that the word inflation doesn't show in the article Capital_flight, but at least devaluation of currency (isn't that the same as inflation?) is mentioned. And in this article about Inflation high inflation and hyperinflation is deemed as "severely disruptive" (don't panic, disruptive might not mean destruction of economy and chaos). Personally I have the feeling of reading an article from the 80's about tobacco in terms like: "smoking is OK, unless you smoke 30-40 cigarettes a day, which is "severely disruptive". This is not going to age very well in the next years.

The idea seems quite simple: people with savings and aware of the loss of purchasing power of their currency will be able and motivated to invest in assets that appreciate value over time (stocks, real estate, gold, etc) to protect their wealth creating demand and increasing prices, while people without savings (because of their low income and the fact that no CPI-indexed salary will ever recoup the ever increasing loss of purchasing power due to fiat money debasement ) will see their wealth decrease just by the passing of time. In a world with zero inflation, people with higher income could very well be happy keeping their money in savings accounts and such demand of assets to cover against the inflation wouldn't be biding up asset prices and everything else in cascade, and lower income people could benefit of a salary that holds purchasing power against basic goods and services that naturally tend to cost less to produce (it's expected after the Industrial Revolution that economy gradually produces more with less resources). Lavidavi00 (talk) 01:20, 8 December 2021 (UTC)

References

The intro

There has been some edit warring over the introductory section. I am concerned that an attempt is being made to conflate this subject with monetary inflation. This seems wrong to me as these are separate topics and because it causes the introduction to diverge from the content in the rest of the article. I would welcome a few more eyeballs/opinions on this. --DanielRigal (talk) 22:26, 16 August 2020 (UTC)

Monetary inflation is Inflation. Prices cannot "inflate" or "deflate", prices rise or fall. Much like a balloon "inflated" with helium causes it to rise. Definitions of the word have been coopted so different dictionaries and common uses of the word have splintered. Unfortunately for most, the consequence of inflation has been so connected to the the word that in common communication we have combined the 2 separate steps of printing money and then prices increasing into one word "inflation." This is an incorrect use of the term both grammatically and descriptively. Consensus on this oage should be limited to economists and language experts, not trolls. Nightside (talk) 23:24, 16 August 2020 (UTC)

You may personally prefer that interpretation, as is your right, but it is certainly not the academic consensus on inflation. The article has to balance all notable views giving appropriate weight to all the more widely accepted ones. Putting one view in the introduction and presenting it as true by definition would be to endorse it over all the others, which would be completely non-neutral. It is not for us to make that call. Our job is to reflect the academic consensus.

Also, please be careful with those personal attacks. I appreciate that you believe that you are obviously and uncontroversially correct and hence find it hard to understand that other viewpoints exist but flinging around accusations of trolling is not helpful.

Anyway, we have each had our say now, so, unless you wish to present any new reliable sources for consideration, let's just wait and see what some other people think. --DanielRigal (talk) 23:36, 16 August 2020 (UTC)

You are not allowing a balanced approach, you are specifically protecting the current version. I have left 99% of the article intact. I tried explaining it to you, but it seems you can't be saved. Time and time again I have tried teaching you that the word has been co-opted, you do not listen. The meaning of the word is not my personal opinion, but a fact of the DEFINITION of the word from the time it was first used in this context. My final word is this: The definition of inflation according to The Federal Reserve is :"Inflation is the process of making addition to currencies not based on a commensurate increase in the production of goods" ref:

https://www.clevelandfed.org/newsroom-and-events/publications/economic-commentary/economic-commentary-archives/1997-economic-commentaries/ec-19971015-on-the-origin-and-evolution-of-the-word-inflation.aspx, download the pdf file, and read it. I can help explain it, but I think it will do no good.

Mic Drop. — Preceding unsigned comment added by Nightside (talk • contribs) 23:50, 16 August 2020 (UTC)

The very first sentence of that linked commentary supports the current article contents. I quote the term has become nearly synonymous with "price increase,". Sure, other ideas existed in the past, and even still persist to some extent, and that is fine. We are not trying to hide that, and we already cover them in detail, but as your own suggested reference shows, that is not what the word means now when used by the majority of economists and other people now, or even in recent decades. The whole point of that commentary article is to encourage people to understand that there is a nuanced discussion around what inflation is and how it has historically been understood. Sure, its author clearly favours the monetarist viewpoint and wants to promote understanding of it, but they manage to do so without crudely pretending that other viewpoints do not even exist. You seem to have latched on to the parts of it that you perceive as useful to supporting your opinions and ignored all the rest. I would also point out that, while American definitions of inflation are certainly relevant, we have to take a global view of the subject. As such, no American source gets the last word on this. (And that is not to say that any British, French or whatever source does either! We have to look at the global academic consensus.) So, you are welcome to drop the mic, if you want to, but the discussion will continue, probably for many decades to come. In the meantime our job, as Wikipedians, is to write about the current state and history of the subject in a neutral way irrespective of our own opinions.

Does anybody else want to have their say on this? --DanielRigal (talk) 17:40, 17 August 2020 (UTC)

I tried helping by fixing a real problem in the world. Don't have time to debate with the ignorant. You'll have to suffer the consequences of your decisions without my help now. Good luck. — Preceding unsigned comment added by Nightside (talk • contribs) 08:03, 28 August 2020 (UTC)

Thank you DanielRigal for trying to safeguard the neutrality of this article. I had trouble with the following sentence from the introduction, which I have now erased (let's see if this will result in an edit war): "The causes of inflation have been much discussed (see below), the consensus being that growth in the money supply is typically the dominant causal factor." This clearly is not a consensus, nor is this what Mankik (the only cited source) claims in his chapter. Rather, Mankiw clearly states at the beginning of that chapter that he is basing his explanation of inflation on one particular theory, the quantity theory of money. Such opinionated view as the one defended by Nightside has no place in a Wikipedia article. Inkathi (talk) 16:46, 11 January 2022 (UTC)

NPOV is that inflation refers to a sustained rise in the overall price level of goods and services, typically measured by a price index. SPECIFICO talk 18:11, 11 January 2022 (UTC)

Source improvement request

@SPECIFICO: I see that you were unhappy with a blog reference in a section I added. I'm assuming you are familiar with the state of the economics literature in general, including how the secondary publications diverge in character from hard science and medical reviews and meta-analyses. I suggest these to augment the Economic Policy Institute publication to which you objected:

1. https://web.archive.org/web/20220313161209/http://www.global-isp.org/wp-content/uploads/WP-132.pdf

2. https://onlinelibrary.wiley.com/doi/abs/10.1111/jacf.12479

3. https://heinonline.org/HOL/LandingPage?handle=hein.journals/intaxr29&div=55&id=&page=

±4. https://papers.ssrn.com/sol3/Delivery.cfm/SSRN_ID4049894_code803290.pdf?abstractid=4049894&mirid=1&type=2

I am happy to add any or all. Did you happen to have any doubt about the wikitext description I included? Dan Ratan (talk) 14:35, 25 May 2022 (UTC)

@SPECIFICO: I hope you will not be upset or accuse me of violating WP:BRD if I revert your deletion of my text with the additional references? If you are unhappy in any way, please revert me again. Dan Ratan (talk) 14:44, 25 May 2022 (UTC)

Please review WP:RS. We need peer-reviewed recent surveys of the topic of inflation. Not the views of select schools of thought and not self-published documents such as working papers. Moreover, I am not convinced that the text represents due weight of the current RS thinking on the topic. Certainly the "quantity theory" had its 15 minutes of fame and we should let bygones be bygones after huge rounds of monetary expansion have produced nothing remotely like proportionate increases in the price indices. Inflation is a core topic in economics, so we should be able to find a tertiary source of unimpeachable quality such as, e.g. a survey of current thinking in JEL or AER. SPECIFICO talk 15:14, 25 May 2022 (UTC)

@SPECIFICO: should I infer by your emphasis on "recent," that you disapprove of the 2018 source from India, but approve of the late 2021 and 2022 sources?

If inflation is a core topic in economics, why does the Inflation section of the Economics article lack any information about inflation?

Did you miss my question about your opinion of the wikitext summary I included, or am I merely unable to discern your answer?

In either cases, these are the most recent secondary reviews on inflation from the journals you mentioned:

5. https://www.aeaweb.org/articles?id=10.1257/jel.52.3.679

6. https://www.aeaweb.org/articles?id=10.1257/jel.52.1.124

7. https://www.aeaweb.org/articles?id=10.1257/aer.20131461

8. https://www.aeaweb.org/articles?id=10.1257/aer.20170721

As I tried to explain, not only are all of them not very recent (because inflation has not been a serious issue for decades, among other reasons) but some of them only support the text I thought best to include by virtue of the fact that they are merely consistent with it, instead of directly pointing to it by implication.

You realize of course, that none of these secondary sources come anywhere near the rigor of WP:MEDRS, don't you? There is one source which meets MEDRS, and is more recent than any of the above four, and is consistent with my wikitext you deleted: (9.) How do you feel about that one? Dan Ratan (talk) 18:26, 25 May 2022 (UTC)

What I said was that we need peer reviewed survey articles or tertiary discussions of inflation. We can't just search those or other journals of similar stature for "inflation" because we do not, as WP editors, decide which aspects or which approaches and viewpoints to emphasize in our artilcles. You could also look for a source in a very recent edition of a mainstream widely-used textbook.There are dozens of such publications from which to chose. This is unrelated to MEDRS. Also, remember that the article text follows the reference sources, not the other way around. SPECIFICO talk 19:23, 25 May 2022 (UTC)

Now that is a good idea. Gregory Mankiw's Princciples of Economics (7th Ed.) Part V (chapters 13-17, pp. 257-367) covers the concepts I added as its overarching main ideas -- along with many other ideas of no contemporary relevance at present, and examples which are mostly no longer valid, e.g. complaining about NCAA athletes being forbidden from sponsorships, which recently changed, but of course that example has nothing to do with inflation anyway. The concepts in Chapter 30, which is devoted to inflation in general, are already covered well in the article, but downward price inelasticity is explicitly considered inflation on p. 648. This is a far better secondary source than any of those eight journal reviews. But (9.), which certainly does pass WP:MEDRS (did you read it?) only mentions downward price inelasticity very tangentially in relation to energy prices, so it's not a great source for the deleted text I'm replacing withe the addition of the Mankiw textbook source. I should probably get a FRED graph of the profits as a proportion of GDP against the CPI and PPI, maybe. Dan Ratan (talk) 10:34, 26 May 2022 (UTC)

First sentence is incomplete.

I believe the opening sentence should be something along the lines of "Inflation refers to an increase in the money supply, loss of purchasing power of a currency, or increase in the general price level of goods and services". This is more in line with the actual article, and reflects the different usage of the word throughout time. Encyclopaedia Britannica opens its inflation article: "inflation, in economics, collective increases in the supply of money, in money incomes, or in prices.". Personally, I believe the only usage of the word that makes actually makes sense is as an expansion in the money supply. Prices don't inflate, they rise and fall based on the supply of money relative to the production of goods and services. Defining inflation as a rise in the CPI is like defining rain as a rise in water level of a lake. It is the rain which CAUSES the lake to rise, and inflation which CAUSES the CPI to increase. Arrowmouse (talk) 21:00, 23 June 2022 (UTC)

You've provided the argument against calling inflation an increase in the money stock. Anyway, that is not the mainstream view. SPECIFICO talk 21:19, 23 June 2022 (UTC)

Please explain how I have argued that. As stated in the history section, the term inflation was originally used to mean the money supply had expanded/was debased. Only in the last ~100 years have people generally referred to rising prices as inflation, rather than the root cause. I will accept that today when people in 'the mainstream' refer to inflation they mean rising prices, even if that definition is not logical.

When referring to financial 'bubbles' we commonly say the bubble is 'inflating' on the way up and and 'deflating' on the way down, using the analogy of a volume of something (money) being rushing into a sector causing those prices to rise. But how can a bubble in a narrow asset class such as tulips or gold 'inflate', if 'inflation' is the general rise of all prices? Arrowmouse (talk) 00:17, 24 June 2022 (UTC)

I'm having a hard time understanding your concern. But just clicking on the first reference link at the bottom of this talk page -- it says inflation is a diminution in the purchasing poiwer of money. That is not the "inflation of the money stock" thingy. Once again, the "inflation is an increase in the money stock" bit is not the mainstream view. SPECIFICO talk 01:07, 24 June 2022 (UTC)

Also, without getting into FORUM and Original Research territory, you should be aware that the Bernancke "quantitative easing" after the 2008 financial crisis greatly increased the amount of reserves (money) in the economy without causing a corresponding price inflation. That was the last gasp of Uncle Miltie Friedman's quantity theory. SPECIFICO talk 01:15, 24 June 2022 (UTC)