In this video inflation inflation is considered as a current consequence of the Obama stimulus package – ie. why it isn’t currently happening, and the theoretical inflation that will kick in once the economy starts to improve.
Most economists agree that inflation of about 2% or 3% annually is a natural function of a growing economy. But people are worried government stimulus measures could spark much higher inflation. Senior Editor Paddy Hirsch explains.
One thing I don’t like about the video is the use of the CPI of 2 to 3 % to represent current inflation, that number is about as undoctored as Michael Jacksons’ face.
Tags: bailout, economy, inflation, Paddy Hirsch
When people talk about inflation, they generally mean ONE OF TWO things:
a) expansion of the money supply (monetary inflation), or
b) a rise in the average price level of goods (price inflation).
Whether or not the CPI is a good INDICATOR of the latter, or the former, is often debated. The CPI is an index, & many economists would argue that it’s geared to under-report inflation (since for example, it leaves out food & energy).
Some would argue that the price of gold is a better indicator.