> Inflation is actually the increase in the money supply. The term is used wrong almost everywhere today.
Do you have a source that this is the „correct“ definition? Wikipedia for example uses the definition you think is wrong, and specifically says that CPI measures inflation.
You can see glimmers of the original definition on the wikipedia page, but the term has been misused for decades noe and basically anything you try to find for a definition of inflation will talk only about prices.
I can't get deep links in wikipedia on my mobile browser for some reason, but here's the full page.
The "Terminology" section vaguely references the original Latin word and gives a few nods to when currency was tied to gold. It is a bit hand wavy, though when it talks about new gold supplies being found or later mentions when the cost of money changes, those are both related to the original (correct) definition. Finding more gold increased the money supply, which may change prices though it doesn't have to.
Toman history sometimes covers the idea well as they inflated the currency by minting more coins to increase supply. I can't find a great link at the moment that covers it well from that angle though, I'll try to come back here when I'm at my desk if I find a good link down that rabbit hole.
If a word has been "misused for decades", its definition has changed.
It's a fool's errand to try to claim the original definition is the "right" or "only" definition at that point.
You've lost this semantic battle against the world, and it's honestly pretty exhausting to see you wasting effort trying to continue fighting a lost cause.
Sure, we could always make a different term for monetary inflation and avoid the ambiguity with the new definition but that doesn't fix the underlying point.
Monetary inflation is an important concept that is now almost entirely ignored. An increase in the cost of goods can be interesting, but its a second or third order effect of an extremely complicated system.
Price changes are meaningless without context and extremely difficult to understand with context. Money debasement, or inflation, is easy to understand and is a primary input to the system rather than a downstream effect.
Wait, is your argument that modern economists couldn't possible be wrong? Or in this case, that modern economists couldn't possibly have co-opted the term to better work with Keynesian economics and MMT?
If physicists decide to reuse the word "meter" for a unit of measuring volume does that mean anyone that uses it as a measure of distance is wrong? Wouldn't it make more sense to create a new term for the new need, a term that doesn't collide with centuries of use?
>If physicists decide to reuse the word "meter" for a unit of measuring volume does that mean anyone that uses it as a measure of distance is wrong? Wouldn't it make more sense to create a new term for the new need, a term that doesn't collide with centuries of use?
Perfect question!
In fact, the definition of "meter" has changed over time, and if you stick with the old definition, you'd be off by 0.2 millimeters:
Science changes as it needs to. (And the word "science" is doing a lot of heavy lifting here when we are discussing economics, aka the dismal science.)
A 0.2mm difference is so vastly different from the analogy he made to using it as a measurement of volume. Hopefully you're putting this forward as an interesting factoid and did not mean it as an actual argument.
Inflation historically was a measure of the change in money supply. They co-opted the same word to instead measure an entirely different concept, the change over time of a basket of goods.
In my book that's very similar to taking a distance measurement and reusing the word to instead measure a totally different concept, volume. Curious how its different though, I may just be tripping myself up here.
Classical economists didn't seem to use the term 'inflation' in either sense. I can't find any evidence that 'modern economists' have corrupted the original meaning, like you imply.
The author certainly makes this claim, but fails to provide any evidence.
"It is during this period [the era between the mid-1830s and the
Civil War] that the word inflation begins to emerge in the literature, not in reference to something that happens to prices, but as something that happens to a paper currency.7"
Could they be wrong about the well-understood label they’ve agreed upon to refer to a particular concept in their field? No, and in fact I’m tempted to class the answer as tautologically “no”.
Growing up, a close relation of mine was an economist, and certainly not of the Austrian school. As a teenager, I was basically ganged up on by a teacher and some kids when inflation was brought up in class. They seemingly had no concept of monetary inflation, and I was forced to swallow that it referred solely to prices going up. I obviously questioned him on this incident, and he outlined that the "prices are going up" phenomenon is price/consumer inflation, and that increases to the money supply are monetary inflation.
Historically, monetary inflation and consumer inflation coincided (Supply of X goes up -> X is devalued -> consumables are now charged at higher X), and so distinguishing between the two wasn't particularly pertinent.
The Roman Empire's observations that debasement of their coins resulted in the increase in prices, meant that the original conception of inflation really was as a monetary phenomenon, not just that prices are going up.
It's really only a relatively recent phenomenon, from the early 20th century, that you had dual definitions trying to occupy the same word, although the concept that price inflation could deviate from monetary inflation probably was starting to be understood with the establishment of price indices in the 19th century.
Keynes arguing that prices could rise independent of the monetary supply post-Great Depression increased the focus on consumer inflation. It was around the 1970s where inflation more commonly came to consumer inflation in academia. 'Stagflation' of the 1970s is probably the tipping point in usage.
To conclude: it's not really wrong to use inflation to refer to monetary inflation, as it's the original usage, but considering consumer inflation as 'inflation' is definitely more in fashion (especially in the US).
Do you have a source that this is the „correct“ definition? Wikipedia for example uses the definition you think is wrong, and specifically says that CPI measures inflation.