Ambiguous Term: Inflation

The term "inflation" is used to denote two different things. Some people use it to mean the expansion (i.e. inflation) of the money supply. Others use it to mean a general rise in price level.

While it is used to refer to two real phenomena, these phenomena are closely related, with one often being the cause of the other. So, while it might be somewhat clear if I say "the duck did not duck", it is really confusing to say "inflation caused inflation". Even stranger is: "in this downturn, huge amounts of inflation have not yet resulted in inflation".

Clearly, we need two concepts and two terms to describe two phenomena:

• the expansion/inflation of the money supply
• a rising/inflated general price-level

One could try to "reclaim" the term "inflation" to mean one of the above, and use a different term for the other. I could think of "inflation" to mean an expansion of money supply, and use a term like "price-rise" for the second phenomena. However, that will still cause confusion when communicating with others. I think the only way to maintain clarity in writing is toabandon the term "inflation" completely, and to use two other terms (perhaps "expansion" and "price-rise") to refer to the two phenomena.