Hacker News Reader

You're thinking of the inflation adjustment the wrong way around. A dollar earned in 1980, if, saved until today, buys less than it would have then.

View on HN

Yes, your second sentence makes sense to me.

I guess I imagined the inflation-adjusted value of X to be defined at time t to be something like: value(X, t) / value(USD, t). So, when I substitute USD for X, I get constant 1.

That was almost right; the correct denominator is value(USD, SOME_FIXED_TIME). Nominal (i.e. non-inflation-adjusted) use value(USD,t) as the denominator implicitly when priced in dollars (hence the term "dollar denominated")

Reply on news.ycombinator.com