▲ | sudo_gopnik 2 days ago | |||||||||||||
Historically - it's actually NOT normal. Link and quote below that examines this with graphs but, the crux is that we have accepted higher inflation in order to achieve stable inflation that is predictable. "For the pre-Fed period (1790-1913), the average annual inflation was 0.4 percent with a coefficient of variation of 13.2. During the period 1941-2016, these figures changed to 3.5 percent and 0.8, respectively. If we look at the post-Volcker era (1988-2016), annual inflation was 2.2 percent on average with a coefficient of variation of 0.4." - Source: https://www.stlouisfed.org/publications/regional-economist/s... Also recommend Debt: The First 5000 Years (David Graeber) and Capital in the Twenty-First Century (Thomas Piketty) which cover this and more on how current concepts of finance and capital post-1914 are incredibly different from the majority of human civilization. I think a broader historical/anthropological approach is helpful here to understand why those tradeoffs were made. | ||||||||||||||
▲ | Aurornis a day ago | parent [-] | |||||||||||||
> "For the pre-Fed period (1790-1913), the average annual inflation was 0.4 percent with a coefficient of variation of 13.2. During the period 1941-2016, these figures changed to 3.5 percent and 0.8, respectively. If we look at the post-Volcker era (1988-2016), annual inflation was 2.2 percent on average with a coefficient of variation of 0.4." - Citing an average number is misleading since the chart of the value of a dollar during that time looks like a zig-zag with some massive swings in both directions. This means periods of severe deflation, too, which can be very bad for people. It definitely was not flat or consistently near zero, though citing an average number is a great way to give that impression. | ||||||||||||||
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