Insights on Inflation: 10 Quotes Defining, Impacting, and Providing Economic Perspectives on Inflation

An introduction to 10 quotes that provide a definition, impact, and economic perspective on inflation. 

⊙ What is inflation?

Inflation is defined as a sustained overall increase in the price level, resulting from a decrease in the value of money. This results in a decrease in the value of currency and purchasing power, causing the same amount of money to buy fewer goods or services than before. Inflation is usually caused by demand exceeding supply in the marketplace, resulting in an increase in the price of goods or services. 

Inflation has a variety of effects on the economy. For example, consumers have to pay more money due to higher prices, which reduces their purchasing power. Businesses may face higher inventory or production costs, which they then pass on to consumers through higher prices. As a result, consumers may reduce their purchases, leading to decreased demand. Inflation can also lead to a decrease in the value of savings and discourage investment, which can undermine the stability of the economy. There are many causes of inflation, including an increase in the quantity of money, an increase in demand, a decrease in productivity, an increase in the price of raw materials, a general increase in wages, and excessive government spending. Central banks try to control inflation through monetary policy to maintain the stability of the economy. Excessive stimulus measures, such as populism to boost the economy, can exacerbate inflationary pressures, so government spending must be carefully calibrated. 

⊙ Quotes on the Definitions and Interpretations of Inflation

• Inflation is when you pay fifteen dollars for the ten-dollar haircut you used to get for five dollars when you had hair. - Sam Ewing

• Inflation is bringing us true democracy. For the first time in history, luxuries and necessities are selling at the same price. - Robert Orben

• Inflation is taxation without legislation. - Milton Friedman

• Production is the only answer to inflation. - Chester Bowles

⊙ The Negative Effects and Economic Consequences of Inflation

• "Mere inflation-that is, the mere issuance of more money, with the consequence of higher wages and prices-may look like the creation of more demand. But in terms of the actual production and exchange of real things it is not.” - Henry Hazlitt, Economics in One Lesson: The Shortest & Surest Way to Understand Basic Economics

• Inflation destroys savings, impedes planning, and discourages investment. That means less productivity and a lower standard of living. - Kevin Brady

• Wage hikes may have been a key driver of inflation. They may now be fueling mass layoffs. - Charlotte Morabito, CNBC

⊙ Insights on the Economic Impact: Government Spending, Monetary Policy, and Inflation

• The usual objection to printing money to pay for government spending is that it will unleash inflation. That would be true if the spending being financed were increasing the overall level of demand in the economy, and if markets expected the government to resort to monetary financing as a matter of course. - Nick Boles

• “Every time the politicians we elect attempt to increase our standard of living or employment prospects by increasing government spending to stimulate economic activity (‘Keynesian economics’ as it is called); and every time a national bank tries to increase our standard of living or employment prospects by stimulating economic activity by increasing the money supply (‘quantitative easing’ as it is called), each of those actions has its ideological origins in the ideas contained in John Law’s Money and Trade Considered, and the actions of John Law’s Mississippi Scheme.” - Gavin John Adams, John Law: The Lauriston Lecture and Collected Writings

• When a business or an individual spends more than it makes, it goes bankrupt. When government does it, it sends you the bill. And when government does it for 40 years, the bill comes in two ways: higher taxes and inflation. Make no mistake about it, inflation is a tax and not by accident. - Ronald Reagan

Motivational Quotes To Inspire You.

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