Quote from: pening on March 05, 2014, 10:28:04 PM

Quote from: MoonShadow on March 05, 2014, 10:09:48 PM

While his explaination is flawed, his understanding of what inflation actually is may not be. A rise in the general price index is a symptom of inflation. The cause of inflation, and therefore what inflation actually is, is the expansion of the monetary base in excess of the economic/population/general growth rate. Take your pick.

Think post above yours covers the important difference between two types that's been ignored thus far, but normally when people say "inflation" they mean price inflation. Assuming this, then any reference or definition will say inflation is an increase in prices. Further, monetary inflation does not necessarily lead to inflation, as you put yourself if the relative demand is in balance. cf Japan engaged in quantitative easing and and printing money for two decades with no inflation to deflation.

Considering the OP was asking for an economic explaination of inflation; the minor fact that most laymen think of price inflation when the word "inflation" is mentioned is entirely irrelevant. The OP set the context. Try and keep up, okay? We won't be stopping the bus if you fall off again.