I was going to find Milton Friedman's definition of inflation. I thought that would be a good place to go next. But before I even got started, I got email from Greg. If you leave a comment on the blog, I get it as email so I don't miss it. And Greg left a comment on the blog:
Actually Art inflation is most commonly defined as a sustained rise in the general price level over time.
So there ya go. That's pretty much word-for-word what I was attributing to Friedman. I'm still looking for that one. But meanwhile, I found this from Investopedia:
Inflation is defined as a sustained increase in the general level of prices for goods and services. It is measured as an annual percentage increase. As inflation rises, every dollar you own buys a smaller percentage of a good or service.
The value of a dollar does not stay constant when there is inflation. The value of a dollar is observed in terms of purchasing power... When inflation goes up, there is a decline in the purchasing power of money. For example, if the inflation rate is 2% annually, then theoretically a $1 pack of gum will cost $1.02 in a year.
Okay. Except a pack of gum is still a nickel, right?
The company did not raise the original five cent price of a five-stick package of Wrigley's Spearmint, Juicy Fruit, and Doublemint gums until 1971. Management reluctantly did so by creating a seven-stick package and charging a dime for it.
Oh. Never mind. Come to think of it, I probably haven't bought gum since the 1960s.