Yeah this discussion around inflation feels a lot like gas-lighting.
> Person: My friend was shot!
> Expert: No, he had his heart stop beating. Stop being so uneducated™ and get your information from places that dont spread disinformation™.
> Person: But he is dead!
> Expert: Stop being so racist and anti-science. All the experts agree that his heart is just transitionally not beating. People dying would make us look bad and that is not the case here!
That is how I see the current conversation about inflation. You're supposed to ignore reality and parrot some dumb talking points. A lack of supply and increase in money IS THE LITERAL DEFINITION of inflation. I don't care about technicalities about gas prices and supply chain. If my money cant buy as much stuff as last year, that is inflation.
Close but, no, not really. There's a subtle difference:
"A lack of supply and increase in money" vs "A lack of supply BECAUSE of an increase in money"
So the situation gets muddied a lot when there is a rather large external factor (or, more generally, when society changes). When a global pandemic hits, mouth mask prices skyrocket. This is not inflation.
That makes no sense. With your augmentation, we could say the 1970s oil shock price increases "were not inflation!" because, you know, external factors.
Iran, we have been embargoed, "it's not inflation".
That would be accurate. They were price increases because of war. Same for Iran.
Inflation is not about changes in the world itself. The price of horse carriages has skyrocketed, because they're a luxury niche product now. The price of global travel has dropped to the point that people are semi-seriously suggesting that mach 15 travel by rocket might become a thing. Paris-Sydney in 30 minutes. That's not inflation and has nothing to do with the actions of the central bank.
House prices, by contrast, are inflation driven.
Inflation is a measure of the effect of the evolution of the money supply. It's done so the central bank can adjust course to optimize how smoothly the economy runs.
It is not a measure of how expensive it is for you to drive to the next city. When Washington decides to go to war, that doesn't affect inflation directly. When your city council decides to block the shortest route to the next city, that doesn't affect inflation, even if it doubles your cost to go there.
> Person: My friend was shot!
> Expert: No, he had his heart stop beating. Stop being so uneducated™ and get your information from places that dont spread disinformation™.
> Person: But he is dead!
> Expert: Stop being so racist and anti-science. All the experts agree that his heart is just transitionally not beating. People dying would make us look bad and that is not the case here!
That is how I see the current conversation about inflation. You're supposed to ignore reality and parrot some dumb talking points. A lack of supply and increase in money IS THE LITERAL DEFINITION of inflation. I don't care about technicalities about gas prices and supply chain. If my money cant buy as much stuff as last year, that is inflation.