Inflation and its impact on society

Abstract

For my purpose I want to define inflation as a persistent and more or less substantial decline in the value of money. Changes in the value of money are measured by changes in the price index figures — or, in other words, by changes in price levels — for these indicate the change over time in the total amount of money paid for a certain basket of goods. I do not propose to make a contribution to the more intricate aspects of monetary theory. This would involve a discussion — for instance — of changes in price levels which do not actually represent changes in the value of money. Examples would include purely statistical changes — thrown up by the method applied in computing the relevant index figure — and price level changes in the terms of trade, either between sectors within one national economy or between several national economies. None of these problems will be considered. I shall, I regret to say, only concern myself with less subtle aspects. That is why I have chosen a simple definition: a persistent and more or less substantial decline in the value of money.