What is inflation and what causes it?

No, I never agreed to that and neither has a majority of online sources I found and posted.

Need I explain it more? In the current round of inflation in which it is estimated by sources I’ve read that about 60% or more of the increase in prices, which were referred to as “inflation”, major corporations/conglomerates owning a vast number of familiar “business” names, which can be thought of as subsidiaries raised prices in order to increase profits using the “cover” of COVID as an excuse. Much of the remainder of price increases was due to supply chain problems created by COVID.

And once a large share of corporate America raises their prices, many others “jump on board” because they cannot afford to be left behind. To compete, they need to keep up with the “leaders”. And then most prices suddenly jumped. Some were raised 2%. Some were raised 60%. Others fell between. But all happened over the same date range in order to keep up or seize the opportunity.

Very little of it was necessary. The remainder was opportunism driven by greed. It is estimated that about 20-25% of the inflation pegged at 8% was due to supply chain issues, and that would mean inflation of about 2% was due to supply chain issues. About 60 or more percent was due to opportunism.

 

I said that COULD BE a justifiable reason for inflation. But rarely does inflation happen ONLY due to increases in the money supply. Usually there is a mix of reasons, and usually some measure of opportunism plays a role based on my own observations.

 

I am not asking you to agree, but all of the above IS inflation.

Ask yourself why increase in money supply causes inflation. Its because it causes prices to increase, which you argue is not inflation.

 

Prices are still exchanges of items of value - goods for money; no change in money in circulation, ergo, no inflation. Pumping money into system with no exchange - inflation. Easy peasy

 

That notion captures the core of the idea, but it is a little more complex than this, as I have already hinted at in my earlier post.

 

I disagree. Of course there always exists a mix of factors but usually in any situation there is one main factor driving the change.

Another semi-common scenario that adds complexity is when there are two main factors that have effects that cancel each other out. Then it might not seem like anything but people do not notice those powerful factors, one pushing inflation and the other pushing deflation.

Another semi-common scenario is when there is a feedback loop or multiplier effect, where inflation will cause something else that will add on to that inflation. Sometimes economists may not have fully predicted the extent to which inflation is going to happen because of this. An example is wage-price spiral theory.

 

True. I was just laying out some of the basics.

 

I'm still waiting for someone to show if/how inflation could occur in a non-monetary economy.

 

A fever is not the cause of a temperature. A fever is caused by an infection.

Price level increase is not the cause of inflation. Price level increase is the result of inflation.

 

Umm . . . . . . . . that’s what I said.

 

Said another way, inflation is a measure of price increases.

 

Can inflation happen without money?

 

What happens if there's not 2x the fish to cover the decrease of chicken?

 

Dunno. You tell me.

 

Probably.
I was illustrating how inflation could happen in a barter system.
Supply vs demand is a cause of inflation.

 

Fish may not change by 1/2 of eggs in that case.
Depends on supply vs demand.

 

Actually wage growth is the most common reason for inflation, but it usually causes more moderate inflation. More money in the pocket, drives up consumption, which drives up demand, which drives up prices.

You did not understand the question

 

So what would the resulting fish to egg price be?

 

Inflating the money supply causes the price of money to go down.

The drop in the price of money is not the CAUSE of inflating the money supply. It is the RESULT of inflating the money supply.

 

Depends on supply and demand.

 

Okay, so the price of one will go up and the other will go down? So no general increase?

 

Purchasing power falls and prices rise. Increasing money supply is one cause for it. I already mentioned the other causes

Yes. It doesn't matter what you use for currency.

You can also have inflation without any change in money supply/.

 

Can you describe how those other causes might occur in a non-monetary economy?

 

Can you describe how inflation can occur in the absence of money?

 

I did that on the other thread, but you insist on having the same discussion on multiple threads, so I am not going to repeat it here