Inflation

Inflation is according to the classical definition "an increase in the money supply" That is "inflation or expansion of the stock of money".

In the 20th Century the most used definition was "an increase in the amount of money and credit relative to the amount of goods available" thus causing an increase in the price of goods.

In the 21st century the meaning of inflation is most commonly used to describe an increase in consumer prices (caused by an increase in the money supply).

Critics argue that this latest definition is confusing, especially for the needs of Bitcoin and Cryptocurrencies, since it is easy to measure money supply, whereas consumer prices can only at best be estimated. Mainstream economics does this through statistical indices such as the CPI which aggregate average prices of a basket of representative goods intended to be similar to the recurring expenses of average consumers. Changes in methodology, political influences and changes in consumer behavior however make such statistics increasingly problematic. A change in the composition of the basket used can yield very different CPI estimations.

See also

• Money supply
• CPI
• Consumer prices
• Chart of total bitcoins in circulation

Bibliography

• Hazlitt, Henry (2007). What You Should Know About Inflation (2nd ed.). Auburn, Alabama: Ludwig von Mises Institute. ISBN 978-1-61016-055-1.
• Palyi, Melchior (1962). An Inflation Primer. Chicago: Henry Regnery Company. OCLC 327322.
• Sennholz, Hans F. (1986). "Inflation and Unemployment". The Freeman 36 (6): 226-233.
• White, Andrew Dickson (1933). Fiat Money Inflation in France. New York: D. Appleton-Century Company. OCLC 5174308.
• White, Lawrence H. (2007). "Inflation". In Henderson, David R.. The Concise Encyclopedia of Economics. Indianapolis, Indiana: Liberty Fund. pp. 262-266. ISBN 978-0-86597-665-8. OCLC 123350134.

Links

• Inflation from The Concise Encyclopedia of Economics
• The Billion Prices Project, MIT, a series of experimental inflation indexes
• The Revolutionary War and the Destruction of the Continental by Thomas E. Woods, Jr.
• The Definition of Inflation According to Mises: Implications for the Debate on Free Banking (pdf) by Nicolás Cachanosky
• "Deficit Financing" and Inflation by Ludwig von Mises and Bettina Bien Greaves
• Gold vs Paper by Ludwig von Mises, orig. published in July 1953
• How the Stock Market and Economy Really Work by Kel Kelly, September 2010
• Currency Failures from Argentina to Zimbabwe: A Brief History of Inflation (video) by Timothy D. Terrell, November 2010
• The Troubled Currencies Project (maps the official and unofficial exchange rates and effective inflation rates of some currencies, where official data is unreliable or unavailable)