Understanding Inflation

Inflation is popularly thought of as what happens when too much money chases too few goods -and that's sort of true, but incomplete. More generally both price and currency inflation refer to change over time in the ratio of the value (V) of that subset of the goods, services, and expectations (e.g. rents) in the world economy normally priced in the currency of interest and the number of units (N) of that currency in use.

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