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Definitions of “inflation” can vary in depth and complexity but what cannot be gotten around is that the MEASURE of “inflation” is % increase in prices. It isn’t percentage increase in monetary or credit aggregates but prices. Same is true in Deflation it is measured as % decrease in PRICES.

There is little that can be said about inflation/deflation without speaking of prices.

You won’t find “price inflation” as a term in Economics Dictionaries.

“Definitions of ‘inflation’ can vary in depth and complexity but what cannot be gotten around is that the MEASURE of ‘inflation’ is % increase in prices.”

Ever wonder why such a measure is so popular? It gives us solid ground for argument, yes. Just like the commonly used and totally fictitious unemployment figures, for that matter. Mostly, it’s because such numbers are convenient to politicians and the economists who enable them. If we never talk about the unseen, we never have to measure the numbers against them.

That way, we can inflate so long as prices go down, even though we’re setting prices higher than they otherwise would be. Likewise, so long as the rate of growth in unemployment goes grows slower, we can do whatever we want to raise employment, even though we have no idea where unemployment would optimally be in a relatively free market. “Price inflation” and “the rate of unemployment” are figures politicians hide behind like, say Phil Jackson might hide behind his career winning percentage. Let’s say he doesn’t retire and the Lakers go on a historic skid. You’d have him say, “Look, I’m still head and shoulders above the average coach in NBA history.” Would that in any way excuse the Lakers’ losing streak? No.

I guess what I’m saying is that inflation is inflation, and unemployment is unemployment. We can call whatever we want, and whatever’s convenient for us, “inflation” or “unemployment.” But everybody knows, on some level, that our numbers are BS.