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Comment by pedro_hab | Hacker News Reader

I didn't define as I want to, I pointed to the fact that the meaning in old dictionaries used to be increase in money supply.

My point doesn't depend on this tho, measuring inflation by rising prices isn't ideal, because you will be measuring multiple things at once, and only the people lose in that case.

Prices can rise and fall for multiple reasons, and knowing why helps to fix it.

If the price goes up because of a shortage, the increase in price helps stimulate more production.

Governments get the advantage of being able to inflate the money supply to the point were it prevents prices from falling, ensuring easier reelection at the price of the people paying more for things and effectively taxing savers.

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> I pointed to the fact that the meaning in old dictionaries used to be increase in money supply.

Monetary inflation is one thing denoted by the word "inflation", and perhaps it used to be the more common use in general conversation. Its not anymore, price inflation, particularly consumer price inflation is the most common general use.

> measuring inflation by rising prices isn't ideal

It certainly is if you are doing for a purpose to which price levels are most directly relevant, which is quite commonly the case. There's nothing mystical about the word "inflation" that creates an all-purpose best measure (and, in fact, "inflation" is a name for lots of different things, which have complex interrelationships.)

>>"Governments get the advantage of being able to inflate the money supply to the point were it prevents prices from falling, ensuring easier reelection at the price of the people paying more for things and effectively taxing savers. "

Governments have the fiscal capacity to keep the economy going. Is your theory that, for instance, the USA economy would be better without the government stimulus?

When the economy goes bananas, if it's not sustained by the government, not only will be suffering of a big part of the population but the destruction of physical capacity and knowledge in the economy.

This is not the 19th century, that idea that the economy on its own works perfectly should be debunked by now.

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