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Austrian economics defines inflation as an increase in the money supply. Inflation causes a decrease in purchasing power, which can result in increased in prices.

 

It is possible for a currency to lose purchasing power even as prices decline. In such a situation, the full benefits of improved production are not redounding to consumers who are being deprived of an increase in their standard of living.

Posted

Most people "know" that prices are going up faster than the statistics suggest, so it was great that Peter took the time to dig up actual numbers.

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