Description
For, despite its painful familiarity, inflation is, from the economist’s point of view, an elusive phenomenon-or, perhaps more correctly, an clusive and bewildering variety of phenomena. The word itself is used to describe several different processes, or states, some- times with prefixes which help to identify what is referred to, sometimes without. Thus, people speak of price inflation, mean- ing an inordinate rise of the general level of prices; of income inflation (or of the inflation of some section of total income, such as wages or profits); of currency inflation, meaning simply an excessive increase in the supply of money, without any necessary reference to what has happened to prices; of cost inflation, meaning that the prices of factors of production have risen; or of suppressed inflation, meaning that, in all the circum- stances, certain specific controls are the only bulwark against an inordinate increase of costs, prices, incomes, or of all three.
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