Post
Topic
Board Economics
Re: Inflation and Deflation of Price and Money Supply
by
thefiniteidea
on 12/02/2013, 14:34:30 UTC
Since we're both very excited about this, and to restrain our words from moving too far from the point, I think we should address one issue at a time.

I will start with a definition of inflation that I agree with:

in·fla·tion  
Noun
  • The action of inflating something or the condition of being inflated (This is the definition not related to economics)
  • A general increase in prices and fall in the purchasing value of money (This definition is related to economics)

My interpretation from the above definition related to economics:

1. Price Inflation refers to the "general increase in prices" part of that definition
2. Money Supply Inflation refers to the "fall in the purchasing value of money" part of that definition

Therefore, I can not agree that inflation "means the same thing as increase", as it conflicts with the "fall in the purchasing value of money" part of that definition.

Note: this is not an argument of what the "general increase in prices" or "fall in the purchasing value of money" means. We can get to that once your interpretation of the word inflation is understood.