I learned from Professor Gonzalo the meaning of these concepts:
Inflation is when the economy overheats: It’s when an economy’s consumables (labor and commodities) are so in-demand because of economic growth, coupled with an expansionist credit environment, that the consumables rise in price. This forces all goods and services to rise in price as well, so that producers can keep up with costs. It is essentially a demand-driven phenomena.Inflation I know; hyperinflation have never seen, people just never wants to get rid of money, they always want more.
Hyperinflation is the loss of faith in the currency. Prices rise in a hyperinflationary environment just like in an inflationary environment, but they rise not because people want more money for their labor or for commodities, but because people are trying to get out of the currency. It’s not that they want more money—they want less of the currency: So they will pay anything for a good which is not the currency.
Then there is Superflation. If hyperflation is a very high level of inflation such as that experienced in Germany in the 1920s or in Zimbabwe today, Superflation is a very high level of hyperflation and is marked by the use of paper currency for wallpaper, memo pads and toilet tissue.
Unflation describes Durkheim's anomie. For definition and related concepts follow the link. One gets older but never stops learning.
4 comments:
"Inflation is when the economy overheats: It’s when an economy’s consumables (labor and commodities) are so in-demand because of economic growth, coupled with an expansionist credit environment, that the consumables rise in
price."
If this did not happen in the mid 2000s with the loosest credit ever, then when could it happen? Something about the economy has changed and inflation is no longer a real possibility.
If inflation is not a real possibility, what is happening and how do you call it?
I would not call it inflation. Where are wage prices rising?
The dollar is getting lighter. Wages are falling. It is a mess.
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