Sunday, 11 August 2013

An Explanation of 'Inflation' - Not

The BBC has published a helpful guide to what inflation is, here.

Of course, it is total bollocks.  It just tells you the result of 'inflation', not its cause.

But there again it is the BBC, so what can one expect?

7 comments:

Bayard said...

"Of course, it is total bollocks."

That's a bit harsh. It is a fairly comprehensive description of what we mean by the term "inflation". Yes, it could have gone into the causes of inflation, but that wasn't really the object of the exercise.

Lola said...

B. No, it's not harsh. The mis-definition of 'inflation' is (IMHO) a large part of what's wrong with the quality of the debate on the economy. Inflation is a function of money, not prices. Our forefathers would have understood that well. I think it's all down to failed cod Keynesianism that the term has become corrupted.

Bayard said...

"Our forefathers would have understood that well"

That is the problem with language, it means what people use it to mean. "Inflation" used to mean one thing, now it means something else. If the word has a jargon meaning, then it ends up with two meanings, otherwise the original meaning starts to wither away from disuse, or survive only in certain sayings, like "gay" in "gay abandon" or "nice", in "nice distinction".

paulc156 said...

BBC's definition is the same as the FT's. 'A general increase in prices'.
What's not to like?

Lola said...

P156 - Because it doesn't tell you why prices have increased. And that is (usually) best explained by 'inflation', aka the unwarranted expansion of money and credit'.

B. Quite. But in the case of the usage of 'inflation' I am of the opinion that the change in meaning is deliberate to mask the true reason for 'inflation'. But you are correct as to useage, as Mr Dogdson points out through one of his characters "'When I use a word,' Humpty Dumpty said, in rather a scornful tone, 'it means just what I choose it to mean — neither more nor less.'"

There are rather too many Humpty Dumpties these days if you ask me.

Bob E said...
This comment has been removed by the author.
Bob E said...

"A let-up in food price rises is expected to have brought down inflation in July ....

"The City expects headline consumer price inflation (CPI) to have eased slightly in July when the Office for National Statistics publishes the latest numbers at 9.30am. Thanks to an expected slowdown in food price inflation ......

Let-up in food price rises expected to have eased inflation in July