Hacker News Reader

Odd nit-pick: When prices of things rise faster than they should, we call that inflation.

I have no idea what "faster than they should" means in this case, and it frankly doesn't matter - it's inflation if prices rise at all (and deflation if they fall).

View on HN

I think what is meant by that statement is that in an ideal scenario, the money supply would expand annually to the exact same degree as the net growth of the value of goods and services in the economy. Inflation is the degree to which growth in the monetary base outpaces economic growth, at least in the short term.

That definition obviously carries many assumptions about net investment flows, savings rates, market efficiency, etc., but I think it's what is meant by "faster than they should."

Yeah the "faster than they should" was kinda weird... I'd rather define it as an increase in the money supply.

Reply on news.ycombinator.com