Certain Austrians are running to defend their idiosyncratic definition of “inflation” as an increase in the money supply, instead of (as people normally use it) a general increase in prices.Social Democracy For The 21St Century: A Post Keynesian Perspective
Austrians and the Definition of “Inflation”
Lord Keynes
My view is that the term "inflation" is ambiguous and also charged with connotation as to obscure the denotation, whether by technical definition or use in ordinary language contexts. Therefore, "inflation" should be relegated to the dustbin of history as archaic and no longer useful in current discourse.
5 comments:
Tom, what kind of concept do you have in mind to replace it? Or are you suggesting we don't even pay attention to changes in "price level" ?
We should say exactly what we mean, like "increase in price index." There is no observable price level. It's a selective index whose configuration is arbitrary rather than fixed.
If you mean expansion of monetary base, then say it.
Same with "asset inflation" and "currency inflation."
"Inflation" is usually used to take advantage of its negative connotation. It's a rhetorical device to persuade emotionally.
See Abba Lerner, Flation: Not Inflation
Some people's definition of 'freedom' is archaic, if not vulgar, perhaps we should stop using that term as well. Same with 'socialism'.
Inflation is synonymous with the consumer price index and related statistics. The only issue is the usefulness of this measurement.
The only definition I accept from Austrians is 'coconut'.
Some people's definition of 'freedom' is archaic, if not vulgar, perhaps we should stop using that term as well. Same with 'socialism'.
"Freedom" is one of the most powerful rhetorical devices and all PR people and propagandists know it. It has a range of meanings, hence is ambiguous and the rhetoricians use that to advantage.
"Socialism" has come to mean any economic activity that is not laissez-faire, i.e., everything that government is involved with. Everything government does other than security and enforcing property rights is "socialism" for most of those using the term in the US today.
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