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Comment by _heimdall | Hacker News Reader

My point wasn't that the term is used this way, its that the definition of inflation has always been an increase in money supply. The common use of the term to mean a change in prices is a useless definition.

Its extremely common to hear "inflation" used to describe price changes, but the number is then used in isolation. Prices change for countless reasons and without detailed context related to supply/demand, strength of the dollar, etc you have NP idea why prices changed. Maybe we printed trillions and prices went up because the supply of money went up Maybe prices increased because demand is outpacing supply. The response to those situations and economic sentiment should be wildly different, but the inflation number may be exactly the same.

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It's pretty cheeky, random internet guy, to tell multiple central banks--whose function can be placed squarely in the realm of economics--that they are wrong about what inflation is.

This Hacker News, people on here think they have a much better understanding than the experts about everything.

And that would even include something like "As a poor, single mother working 2 jobs in Pennsylvania, how is my life better under the current administration?"

"You probably rely on medicaid or medicare or the AHCA for health coverage. The first two are going to get slashed and the third is going to get shit-canned. Oh, and if you have a pre-existing condition, that's going to come under consideration again. Price controls are going away for medications you or your kids might rely on. There will be no raise in minimum wage and with tariffs coming, you might as well get a third job."

That would be my response, based on the past actions of republicans under Trump.

A quick google and most of this seems to be lies (not exactly surprised after 4 years of left-wing govt).

I didn't realize I was talking to central banks here, that's good to know.

I believe your argument, though, is that those in power can redefine existing words to whatever best suits their current needs and we should all accept that and not consider why we had the original definition in the first place?

> its that the definition of inflation has always been an increase in money supply

Can you provide a single source for this?

I'm looking at textbooks from 25 years ago (Macroeconomics by Doepke Lehnert Sellgren) and they also contradict you. How far back are we supposed to look for your definition?

https://www.clevelandfed.org/publications/economic-commentar...

Heres a good source I just found as so many were looking for sources here.

I believe it was around the 1960s or 1970s when most economists started using "inflation" to mean price increases.

The history there is pretty fascinating, it was basically a reaction by modern monetary theorists who really had to redefine it for their economic system to make sense. A core goal in MMT is to have a fiat currency and controls in place to let you manipulate the money supply quickly in an attempt to move the economy in one direction or another. With the original definition, inflation is actually the tool used by MMT rather than an indicator of economic health.

That history also pretty clearly explains the shift. The argument pretty quickly shifted to being based on the effects. Debtors favored currency supply inflation because it increased prices and thus decreased. Lenders favored the opposite.

Since most of the people arguing about the term care about a specific class of effect, the term grew to encompass that type of effect. As our understanding of the cause of that effect grew, the term shifted to primarily meaning the effect.

This all makes complete sense since most people don't care about the cause in itself but about how prices are changing.

> This all makes complete sense since most people don't care about the cause in itself but about how prices are changing.

I would hope that isn't true, an economy would function horribly if we only cared about the price change percentage and didn't care why it happened. If prices went up because most people had more money to spend you should act much differently than if prices went up because supply collapsed, for example.

> I would hope that isn't true, an economy would function horribly if we only cared about the price change percentage and didn't care why it happened.

That isn't what I said.

The causes of inflation to matter, but we generally only care about them because they cause inflation. We don't tend to care nearly as much about the causes in and of themselves.

Thus as the argument about how much inflation there should be progressed, it is perfectly natural that the term came to refer to the part of the debate we actually care (how fast prices rise) about rather than factor that can sometimes cause it.

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