Talk:Inflation

Economics v Mathematics

I find it really interesting how this article reflects that economics is a soft, social, if not pseudo-science or religion. As a mathematician and systems analyst, I have studied the history of monetary reform and have been slapped on my Wiki editing fingers when I wanted to add my definition of cash crumble.

But I'd like to suggest that majority knowledge or textbooks do not represent truth as far as economics is concerned.

The editor of this page is therefore indeed responsible for showing the different interpretations even though the term is essential for national policies and central banks and balance the number of lines per viewpoint.

The daughter of the author of http://webofdebt.com who wanted to write her PhD on money supply and money creation at the London School of Economics was prevented from her choice of topic because it is not Capitalism! Follow the money of LSE funding and you may realise why.

For economics has been created as textbook knowledge to protect the banks' privilege of creating Credit coined by them as broad money in contrast to Cash which they call narrow money. What's the difference? Interest! If economists understood that as well as the exponential function, they would not possibly advocate economic growth. For the state creates Cash and banks create Credit. But who creates the interest necessary to pay of any credit, whether borrowed by governments, corporations or individuals?

See http://forumnews.wordpress.com/understanding-exponential-growth/

I also find it suspicious when contributors hide behind funny names rather than act as authors who publish authoritatively on a subject.

Stick to your guns, dear Wikipedia editors! The page on social business has shown to me how people use Wikipedia to pontificate their views - no matter how beneficial for the public interest they may be. —Preceding unsigned comment added by Sabine McNeill (talk • contribs) 09:37, 14 September 2008 (UTC)

Judging by the information you provided in this rant, the problem with the initial edit of "[your] definition of cash crumble" is probably related to your choice of sources. You will not be successful in posting blogs (e.g. wordpress) as sources, nor will you be successful in using bias sources such as "Web of Debt" unless you balance it with another equally bias source (see WP:NPOV and WP:SOURCES).

Thanks for this explanation! (talk)

I think you are missing the demand side of this equation. Interest is the cost of using the money borrowed. In economics, profit is considered the net accounting profit minus the cost of borrow the capital to create that profit. To simplify, money demand must be considered when making assumptions about money supply.

Good Luck -- EGeek (talk) 19:46, 15 September 2008 (UTC)

I'm afraid you're missing the difference of demand for money as national currency by governments and for money as a medium of exchange or 'financial product' the way you use it. The last thing I'd want to do is to simplify. Very sad if that's what economists do. I'm not making assumptions about money supply. I've studied the statistics of the data base of the Bank of England and the Treasury. (talk)

Very interesting. Can you explain whether interest is a third type of money besides Cash and Credit?

NO. (talk)

Do Cash and Credit have the same monetary characteristics?

No. Cash is interest-free. Credit is interest-bearing. (talk)

Does Interest have the same characteristics as the first two or different ones?

No. For just as you don't see whether the money in your bank account comes from Cash or from Credit, so don't see whether interest payments are derived from Cash of from Credit. (talk)

This is a whole new way of looking at economics.

Indeed. Sociologists and anthropologists also feel the need to redefine economics!

(talk)

WhiteItems (talk) 05:28, 15 September 2008 (UTC)

Is there a Cash money supply and a Credit money supply?

Yes. Cash comes from the State. Credit comes from private banks and other financial institutions. (talk)

The problem comes from unclear definitions. Money, money substitutes and currency often all carry the same definition or are used interchangeably. This is faulty. Money must be a tangible asset so that it is subject to only exchange rate risk thus eliminating exposure to either payment or counter-party risk. Either money or money substitutes can function as currency. The Federal Reserve Note Dollar is a money substitute or Bill of Credit as defined under Article 1 Section 10 Clause 1 of the US Constitution. Under Article 1 Section 8 Clause 5 Congress is given the power to 'coin money'. Notice it does not say Congress can 'print money' because then it would be a money substitute and subject to payment risk. This was commonly understood vocabulary given the recent experience with the Continental Dollar.Jonahtrainer (talk) 9:36, 17 September 2008 (UTC)

Would there then also be an Interest money supply?

I can't make it happen. So I don't ask the question. (talk)

Would there be Interest Bank notes and coins?

WhiteItems (talk) 06:01, 15 September 2008 (UTC)

There could / should be. Demurrage is a term for that kind of thinking.

(talk) 

Essentially, there is only cash and bank liability. Cash is actually a liability of the central bank, central government if no central bank exists, or the institution that issued the cash. See the articles on credit and interest for their respective explanations. -- EGeek (talk) 19:46, 15 September 2008 (UTC)

Argentina

Graphic is out of date, Argentina's inflation nowadays is between 5% and 10% (source: INDEC, national institute for statistics and census). If someone could change that, I would be very pleased.

Gregalton please leave this article alone

Gregalton, I think you should work on another Wikipedia article.

Maybe we can see who supports this request.

Kjkkkjj (talk) 21:11, 18 August 2008 (UTC)

Misessus (talk) 12:38, 19 August 2008 (UTC)== Expert needed ==

I really don't see how anything could be gained by flagging for an "expert". A Keynesian expert will support the Keynesian view, a monetarist will support the monetarist view, an Austrian the Austrian view.

I can speak only for the Austrian texts, but considering that every paragraph is supported by several sources, I should really like to know what the one who flagged for an expert is hoping to gain.

Could someone please explain that to me?

Misessus (talk) 18:13, 18 August 2008 (UTC)

You can go back on the histroy file and see which user flagged for an expert. Then you can ask the flagger why he or she flagged for an expert. Maybe someone here can tell you how to do that quickly.

X-11111 (talk) 21:05, 18 August 2008 (UTC)

BTW, has this article been downgraded?

X-11111 (talk) 21:16, 18 August 2008 (UTC)

I flagged it for expert help. I felt that there was too much edit warring going on and that there was a real risk that the article was becoming unbalanced. I am not qualified to fix this myself so I thought that the best thing was to get in some people who really know this stuff to make sure everything is OK. It would also help to take some of the personal nature out of the issue for there to be a few more people actively editing here.

I don't think this article has been formally reassessed and downgraded but it might not hurt to reassess it, or at least do a quick sanity check on the current assessment. That said, I am not asking for it to be downgraded.

I don't agree that it is a waste of time to tag for expert help. A true expert is able to understand all viewpoints and write about them all fairly without giving undue favour to his own position. This is exactly what we need. --DanielRigal (talk) 21:57, 18 August 2008 (UTC)

DanielRigal, I agree with what you say. I also agree with what Misessus says. Inflation is such an important process in the world economy that it is going to be difficult to find a truely neutral person. The reason being that no-one knows the complete right answer. All the schools of thought have a bit of the truth. I find it has enriched the article a lot to give more prominence to the Austrian school although I think they are completely wrong rejecting fiat money. They are obviously completely correct in their money supply arguments. I am not an Austrian at all. I think we should try and accept that at the moment there is no known "correct" answer for inflation and we should try and take the best from all the different viewpoints - as we are doing. I think a lot more is still going to be discovered over time about inflation. I think to just blindly believe that the mainstream view is 100% correct is wrong. No-one knows the 100% answer. If we had known that we would have 0% inflation in the world today. 22:17, 18 August 2008 (UTC) —Preceding unsigned comment added by X-11111 (talk • contribs)

X-11111 (talk) 22:19, 18 August 2008 (UTC)

X-11111

The debate over inflation has never been about anything else than the actual meaning of the word itself. The first form of infaltion was the direct debasement of currency by mixing pure silver and gold coins with lesser metals. This was widely practiced throughout the middle ages. The word "inflation" first surfaced in the early 19th century with the explicit meaning of printing new units of currency, i.e. US dollars.

The Austrian Business Cycle Theory has throughly explained what happens when you increase the money supply in such a way. The theory is based on logical deductions from fundamental economic laws. Austrians generally do not view empirical studies as a proper method for examining economic theory. However, if you want empirical "evidence" proving the soundness of the Austrian Business Cycle Theory, they're all around you. The Wall Street crash with the subsequent Great Depression, the dot.com bubble in early 2000 and today's credit crunch. Just to name a few examples out of many.

As for having no inflation, should we know the whole answer. I'm sorry, but that is like saying "should we all know the horrors of war, we would have world peace".

The use of inflation (as defined by Austrians) is of great benefit to the state and the financial-industrial complex. Firstly, the state can use inflation as a "painless" way of funding its activity, e.g. welfare programs and militarism. The financial sector on the other hand, always get to use the created money first, when it still has most of its value. Also, the current system, which is based on fractional reserve and fiat currency enables them to create their own credit, thus earning billions and billions in interest on money they themselves have fabricated. The erosion of the purchase power of the new money is a process which true effect only becomes evident when it has trickled down the lairs of society, from the big investment banks at the top to the ordinary worker at the bottom. In addition to that, the protection the big banks and other GSE's enjoy make them obviously more prone to give loans to people who can't pay. After all, with all those billions of fake credit lying around, you have to give it to someone.

Inflation has always been a means to an end for the state and its preferred businesses. This was a known fact as early as the beginning of the 17th century, when Juan de Mariana published his book "De Mutatione Monetae", in which he warned of the dangers of dilluting the Spanish silver coin with lesser metals. You see, just because something is bad for the people, it doesn't mean that it isn't good for the state. The state and the people are two entirely different things who generally have entirely different interests. And yes, that applies to a democracy every bit as much as to a dictatorship.

This debate isn't about who's right, it is about who sticks to the original, documented defintion of the word inflation, and who is helping the state covering up what inflation is all about. I think we all know the answer to that question. Is there any wonder then, that the politicians have always preferred the mainstream schools?

Misessus (talk) 07:01, 19 August 2008 (UTC)

I think the original definition of a word is not as fundamental as you claim. Language changes over time. Many words have changed meaning dramatically. "Gay" is a particularly obvious example of a word changing meaning. We can, and should, note older meanings of words but the language we have to use is the language that exists now and is documented in contemporary dictionaries. This isn't 'Ye Olde Wikipedia'.

I know that sometimes one can feel that language has developed in a negative way and to want to change, or change back, the meanings of certain words. It is an impulse to be resisted because the struggle is futile. To attempt to use words differently from their accepted definitions is only going to cause confusion. We have to take the language as it is and explain things as accurately as possible within that framework. --DanielRigal (talk) 11:14, 19 August 2008 (UTC)

Daniel,

language does indeed change over time, but scientific terms seldom do. The word gravity has been around for a long time, and is never likely to change meaning. However, the change of the definition of inflation is a result of the mainstreamers wish to make economics more scientific, a campaign that went on during the 1920s, 30s and 40s. Inflation wasn't the only term that was changed, same thing happened to the term "competition". There is, however, no theoretical basis for this change. Subsequently, the whole reason for this debate is the deliberate change launced by the mainstreamers.

The word "inflation" meant exactly the same thing for about 100 years, before Keynes & Co came a long. Thus, the word "gay" is hardly comparable to the word "inflation". No one deliberatly changed the the meaning of the former, it evolved with the language. The latter, however, was subject to such a deliberate change.

So no, my friend, lingvistics and evolving language has nothing to do with this issue. Nothing whatsoever.

Misessus (talk) 12:38, 19 August 2008 (UTC)

Words are powerful. I agree that we should use the meaning of words as they are being used. It is also true that we are improving our understanding of inflation all the time. With that we also improve the use of inflation jargon to reduce the confusion surrounding the concept of inflation. Inflation still is a very foggy concept.

MainstreamEconomist (talk) 21:20, 20 August 2008 (UTC)

Again, the redifining of the word "inflation" has nothing to do with understanding inflation. Quite the opposite, in fact, as the redifining has lead to an almost total confusion of what inflation is all about. The origin of the word has been well documented through out history. When the word itself started to appear, it was clear to everyone what was meant by it. Those who favoured inflation, i.e. those who favoured central banking and national debt, called themselves "inflationists". In their view, central banking with all that entailed was good for the economy. They thought it was necessary for the state to be able to create money out of thin air.

No one, neither those who opposed the use of inflation nor the ones who favoured it ever quarrelled about what the word meant. No one disputed that inflation meant increasing the money supply through the creation of new units of currency. What they argued about was whether it was good or bad for the economy to engage in such activities. No one ever defined "inflation" as a "rise in the general level of prices". No one. The word existed for over a century, and the action itself was a widely practiced policy for centuries before that, prior to the appearance of present day mainstream economists, who introduced a completely new definition.

This is all well documented and this article offers externally linked references to parts of that documentation. Please just read it and accept the historical facts as they are.

We can debate the effects of inflation till the cows come home, but the original and thus true definition of the word is not subject to debate, no more than the meaning of the words "blood", "gravity" or "moon". The level of denial presented by mainstreamers never ceases to amaze me. Not only do they deny the disastrous results of economic policies based on mainstream theory (such as New Deal), they also deny documented, verifiable historical facts. It's simply amazing. Not even most politicians are able to reach that level of denial. —Preceding unsigned comment added by Misessus (talk • contribs) 10:34, 21 August 2008 (UTC)

Is it perhaps not true that, before fiat money, inflation was adding one or millions of monetary units to the money supply. With the advent of fiat money - what you call creating money out of thin air, a reality or fact that you are in total denial about (although the whole world economy operates like that and there is no sign that it is going to change), even more in denial than you accuse us mainstreamers of, so prices rise as the result of a complex of economic activities, at the same time the money supply increases as well as a third factor operating at the same time, that is, actual new wealth created in the economy. Since only a specific level of money supply is required at any specific level of wealth in the economy, the rise in the general price level indicating inflation, is the way inflation is revealed as well as measured.

MainstreamEconomist (talk) 11:45, 21 August 2008 (UTC)

Mainstream,

how about if you actually read what is being written? Where have I ever denied the existance of fiat money? For heaven's sake, the existance of fiat money is the very thing I and Austrians lament more than most, as it enables the state to inflate at will. We strongly oppose fiat currency and have been opposing it for over a hundred years. I know that mainstreamers don't know the meaning of the words "inflation" and "competition", but I would have hoped that you at least knew the difference between denying the existance of something and opposing the existance of something. Clearly, I gave you too much credit.

In fact, one of the main reasons for abandoning the gold standard in favour of fiat currency was exactly that, to enable the state to create endless amounts of new money. December 18th 2007, the European Central Bank created and injected 349 billlion euros, equivalent about half a trillion US dollars, in one swoop. Just like that. One can only imagine the complete inflationary effect that credit injection had, when expanded within the FRB-system. Such a feat would be practically impossible under a gold standard. And nor should it, as it leads to a massive erosion of the value of peoples' savings and real income.

The reason for the ever returning crisis is the very fact that the world economy is based on fiat currency, fractional reserve and central banking. As long as we keep going like this, recessions and depressions will always plague us, in addition to all other inflation funded activities of the state, like war and imperialism.

Wealth has nothing to do with money. Money is a medium of exchange that be virtually anything, the only requirement is that is an acceptable good for most people. Historically, many different things has been used as money, such as salt, grain, animal skins etc. However, through the market process, gold quickly evolved as the preferred means of exchange, because it is eminentely suited for the task.

The statement that increased production and through that increased wealth demands an increase in the money supply is utterly absurd. Even if inflation is an age old trick employed by the state, it is thousands of years younger than production itself. Thus, both production and wealth has increased for thousands of years before anyone came to think about increasing the money supply, proving that increased wealth does not require increased money supply. Total wealth consists of total supply of goods in existance. If the supply of goods increases and while the money stock remains constant, the value of every unit of money increases. Consequently, if the state inflates the money supply while the supply of goods remains the same, the value of each unit of money decreases. Also, it is completely impossible for the state, or anyone else for that matter, to calcualte the increase or decrease in the total supply of goods and adjust the money supply accordingly.

Inflation has never been about matching the supply of goods with the supply of money. From the very beginning it was a means to an end, a way for the state to fund its own activities. This has been throroughly documented through the past several hundred years. You need only to open a book and read about it.

-Misessus

Misessus (talk) 06:01, 23 August 2008 (UTC)

Misessus, Gregalton revealed that you are are a sockpuppet

Misessus, I see you are a sockpuppet according to Gregalton. He has your name down on at least two checkusers searches that are going on secretively behind the scenes in the dark and hidden away Wikipedia mafia world that many Wikipedians spend so much of their time in - like Gregalton.

That is the problem with Wikipedia - the Wikipedia mafia world: hidden away - operating while we try to improve Wikipedia articles.

Well, Misessus, for a sockpuppet, you have added a lot to this article. Congratulations. Being a despised idiotic worthless scum of the world sock puppet - according to Gregalton - you made one hellavu difference to this article.

Keep it up, you sockpuppet!!

X-11111 (talk) 23:18, 18 August 2008 (UTC)

Untrue. Misessus is not a sockpuppet. It was indeed checked under WP:RFCU, which I had requested given the previous disruptive and deceitful behaviour of another user. This procedure is not at all secret if (as, during your first series of visits you had read the instructions as I suggested, you would know).

You, however, are using two different accounts (X-11111 and Kjkjkkk or whatever), which is indeed sockpuppeteering and also a violation of policy.--Gregalton (talk) 04:39, 19 August 2008 (UTC)

I invite any investigation. The texts concerning the Austrian view are by far the most soucred texts in this article. Anyone who doubts what has been published, need only to click on the external link in every footnote and read for himself. Misessus (talk) 07:17, 19 August 2008 (UTC)

The Tag

Daniel,

I still don't understand the tag. Mainstreamers and Austrians will never reach consensus. The former have fabricated a new meaning of the word inflation, whereas the former hold on to the original definition. Because they disagree on the actual meaning of the word, they also disagree on the causes, effects and ways to control it. That will never change. You wouldn't get a consensus here, even if you'd raise Rothbard, Friedman and Keynes from their graves.

That said, can you please explain exactly how this expert would be able contribute? What exactly is it that you'd expect him to do? I'll leave the tag for now, but unless you can give a detalied and above all sensible answer to the questions above, I will remove it again. —Preceding unsigned comment added by Misessus (talk • contribs) 06:38, 22 August 2008 (UTC)

First up, I think you are mistaken in assuming that there is no such thing as neutrality in an editor on this subject. Somebody with a broad academic knowledge of economics (i.e. an expert) will understand all the economic viewpoints that exist in detail and be able to write about them all accurately.

Secondly, I think that you are right that there will be no consensus on the true measure of inflation but that doesn't matter. Our role on Wikipedia is not to judge who is right and who is wrong. Only to make sure that the various views on the subject are presented in a way which is clear and accurate and which is proportionate to the extent to which the views are held.

There are a few things I think a expert can help us with:

• An expert can determine whether the article currently over-represents or under-represents any of the viewpoints, or presents them unclearly. This is not just about the representation of the Austrian School. Some people have commented that they feel the article is not easy to understand more generally.
• An expert can decide if there are other schools of thought which deserve inclusion and how to include them. It may be that there are other non-mainstream views worthy of inclusion. It may be that we are remiss in not having any coverage of inflation in Communist theories and systems, for example.
• An expert can decide to what extent it is sensible to have the Austrian School view, which is based on Monetary Inflation in the Inflation article, which is about Price Inflation. The expert may decide to move some of the coverage to the other or restructure in some other way that makes things clearer.

I have a gut feeling about all this but my gut feeling may be wrong. My gut feeling is that the main coverage of the Austrian School view of inflation belongs in the Monetary Inflation article because that is the type of inflation it is concerned with. It might be that the only reason to mention the Austrian School in this article is to explain that it rejects the significance of Price Inflation.

I don't think it is possible to have a coherent article on inflation on the basis of assuming that there is one thing called "inflation" and that there is disagreement about its nature. I think is is why we get into disputes so easily. Your argument about a "fabricated" meaning to the word seems unproductive. To some extent all language is fabricated but we have to deal with the language we are given, learn Latin, or go to war with the dictionary. Instead, we need to be clearer that Price Inflation is one thing and that Monetary Inflation is another. Most economists believe in both but have different views of their relative significance and relationship. Once we state that clearly then we have a framework for talking about the various views more clearly using language which nobody can find ambiguous or objectionable.

--DanielRigal (talk) 17:25, 23 August 2008 (UTC)

Inflation is always and everywhere a monetary phenomenon: Milton Friedman. Inflation is one economic concept.

MainstreamEconomist (talk) 19:40, 23 August 2008 (UTC)

Daniel,

Being a neutral editor does not mean favouring all or none of the views presented, its about presenting the view you think is right without explicitedly saying so. The ability to present, for instacnce, the Austrian view without proclaiming it to be the one and true, without saying that mainstreamers are wrong.

So no, you are completely mistaken in asssuming that ”an expert with broad academic knowledge of economics” even exists, let alone would be able to contribute to this article. Economic scholars all adhere to one school or another, and are thus utterly unable to write accurately about all schools.

And on that note, exactly what inaccuracies about the Austrian School has been published? The inflation article has looked exactly the same for months, if not years, before I started adding the Austrian view. Since that, very little has been edited or contributed to the mainstream texts. You don’t seem to have any problem with them, so what you’re acutally saying is that you don’t trust the Austiran texts. Okay, that is your right, but bear in mind that over half of the footnotes in this article refer to Austrian literature, making the the Austrian contributions much more sourced, and therefore much more reliable, than the mainstream texts.

Thus, your first argument is countered.

As far as the Austrian view goes, it is presented very accurtately and thoroughly sourced, no problem there. The Austrian texts constitute but a fraction of the mainstream texts, so if you want to promote the mainstream view, nothing has been done to negate that, admittedly tragic and faulty objective.

Thus, your second argument is countered.

As for the things the expert could help us with. Firstly, its all about the Austrian view, to claim otherwise is beneath you. The only thing that has changed since the Austrian view started to appear is exactly that, the Austrian view started to appear. Nothing else was edited or added. I’m quite sure people feel the aritcle is not as easy to understand as it once was, because for the first time in their lives they are confronted with the original meaning of the word inflation and the history of the act of inflation, and that goes against everything they’ve been taught. That is always confusing, even traumtic. It is, however, the best way of gaining knowledge.

If people want to add other schools to the article, let them. We don’t need an expert to either permit or disallow that.

The third thing you wan this ”expert” to do is simply to cencor the Austrian view, which is what I’ve always said you and Gregalton have been wanting to do. This article is about inflation, not price inflation or monetary inflation, but inflation. Thus, the origin and history of the word inflation has a definate place here. The fact that the Austrian School is the only one who still maintain the original defintion is of course embarrassing to the whole science of economics, but that is the mainstream’s problem.

Thus, your third argument is countered. If you want to cencor the Austrian view, just say so. Trying to covering it up like this doesn’t become you.

As far as your gut feeling goes, I can tell you, you are wrong. Argument number four, i.e. your gut feeling, is thus countered.

As for a coherent article on inflation. If you want that, then you need only to remove all mainstream (and the lesser theories) text and move it to an aricle called price inflation. Then I’ll move some of the Austrian text to the article monetary inflation. Left on this article, on inflation, won’t be much more than the original defintion and some text about debasement of currency. It wouldn't be exactly accurate, but a lot better than what we have today.

About the evolving language thing, please stop bringing that up, it is embarrasing. Scientifc terms don’t change their meaning just because the language evolves. The reason for that is that scientific terms are not used in normal discourse, they are reserved for scientifc discourse. Inflation isn’t the only term that has been redefined by the mainstream economists, and the redefining has nothing to do the evolution of the language.

Now, as all your arguments have been countered and your true motives for wanting an expert have been revealed, I will remove the flag and keep removing it, should you decide to put it back.

Misessus (talk) 20:11, 23 August 2008 (UTC)

I am very sorry to hear you reply in this tone. Without an assumption of good faith it is impossible to discuss anything meaningfully. This is a pity because there are things in what you say which could be worked into constructive approaches.

I can honestly deny that I want to censor you or that there is any conspiracy to keep the Austrian School view out but it is clear that you would not believe me. I am disappointed that you have chosen to appoint yourself arbiter in these matters. I don't think you are any more able to take this role than I am. Your gut feeling is worth the same as mine. The only difference is that you place a higher higher value on yours than I on mine. Although you don't see it, this demonstrates the need for independent help to reach a consensus. Now let me turn all this around and ask you Why are you afraid of expert help being brought to this article? If the coverage of the Austrian School is, as you claim, all correct and proportionate to its relevance to the topic then all an expert is going to do is give everything a clean bill of health and maybe assist in improving the article in other ways. Would that be so bad? There isn't an article on Wikipeadia that can't be improved in some way or other.

Anyway, for what it is worth, this article has been considered confusing in the past and I do wonder whether it is clear and balanced. As a non-economist I don't find it an easy read. I was not being disingenuous in my reasons for calling for an expert. Of course, the extent to which the Austrian School should be covered was one of the main things I wanted considered, and I have not tried to deceive you of that, but I am also open to the possibility that it needs improvement in other ways. The article has been on my Watchlist for a while. I can't remember how it got there but I probably followed a vandal here. I have never been very happy with the article but I have lacked the ability to do anything with it myself.

I am not going to put the Expert tag back or make any drastic changes in the article. My hope was that an expert would help to get us to a point where everybody was happy but if you don't believe that such an expert exists then obviously they would be unable to do this. I will see how things develop. If I see things getting out of control I may tag for Requests for comment but I am not going to do that for now. --DanielRigal (talk) 22:03, 23 August 2008 (UTC)

I'm replacing the tag. Since Missesus is not interested in paying attention to what WP:NPOV means, and believes that only he carries WP:truth, further debate with him does not seem to be fruitful.--Gregalton (talk) 04:58, 24 August 2008 (UTC)

Daniel,

Could you please stop presenting yourself as a martyr? I answered each and everyone of your arguments, one by one, and countered them. The arrogance of your approach is starting to annoy me. The fact is that you presented your case, and I presented mine. It just happens that my case was stronger.

I don’t think there is any conspiracy at work. Conspiracy suggests something covert. What you and Gregalton are doing is anything but covert and is something I’ve seen many times before. Besides, you said yourself that one of the things you wanted this ”expert” to do is judge whether or not the Austrian view has got too much room. What is that, but pure cencorship? Moreover, you only got active when I started contributing, first by simply deleting the Austrian text without explanation. When I made it clear I wasn’t going to stand for that, you started this ”only the mainstream should be given exposure” –nonsense. When the folly in that was revealed, you moved on to the ”evolving languange” –scheme, politely suggesting all Austrian text should be moved to the ”monetary inflation” article. It's tragic.

Interesting that you are calling me a selfappointed arbiter, considering what you and Gregalton have been doing for God knows how long on this article and others. Talk about a complete lack of self awareness. However, I do suggest I’m more capable for that role, because I am in fact an economic scholar, whereas you are...what exactly when it comes to the science of economics? It may be that I place a higher value on my own gut feeling that you do on yours. If that is the case, the explantion for that was just given.

Again with this consenus business. You’ve state yourself that consensus can’t be reached. Now you want to reach it again. Make up your mind, will you?

I’m not afraid of the expert, I oppose it because it is obviously nothing more than a ploy to get your way. That is hardly a reason to call an expert, not to mention I will have no way of knowing who this ”expert” is. Suppose I got Walter Block to check out this article, and he’d say the Austrian view should be moved front and center and most of the Keynesianism should me removed completely, and the remainder put under the ”Other theories” section. Would you be okay with that?

The coverage of the Austrian in school is completely correct and neutral. The proof of that is in the numerous footnotes. Read the sources if you are in doubt. Exactly nothing was taking place on this article before the Austrian view was being added, so you were all obviously happy with it as it was. Equally clearly, you are not happy with having the Austrian view displayed at all, but can’t find any reason to delete it, and you certainly can’t question the correctness of how the Austrian view is covered, because of the footnotes. The only thing that has happened to this article is that it has been expanded somewhat. None of the other texts have been edited, so what is the problem? Well, the problem is that you and Greg don’t like the Austrian School and are making up rediculous reasons to get rid of it.

Nothing the mainstream economists write are easy to read, because its just a mishmash of math, modelling and made up concepts. So in the interest of making the article reader friendly, maybe we should start by deleting the Keynesian texts. What do you say to that?

Gregalton

I am removing the tag. Your childish slurr clearly shows your character. I’ve stated my case clearly by answering all arguments. I’ve never laid claim to any truths, only the right and reason to add the Austrian view to this article. The fact that you take such offence to that, is really tragic.

Misessus (talk) 06:21, 24 August 2008 (UTC)

For childish slurs, please refer to your comments on my talk page - where you also quite clearly stake you claim to the truth, stating that the Austrian school is "the only school alive today that recognizes the existance of fundamental economic laws. Additionally, it is the only school of thought that understands and maintains that economics is a social science".--Gregalton (talk) 11:26, 24 August 2008 (UTC)

Gregalton

I am quite certain the Austrian School is right, for various reason. One is that the Austrians are the only ones who actually treat economics as a social science and therefore don’t try to apply the methology of the natural sciences. Another is the grevious disasters mainstream economic policies have led to, such as the New Deal and the current credit crisis. A third is that the mainstream view always have been very popular with politicians, which is a clear sign that something is not right.

What I haven’t done, however, is to make the claim that Austrian School is the one and true school in the article. That is neutral editing, my friend, something you know absolutely nothing about. I may despise the mainstreamers and find their so called economic theory laughable, but I don’t say that in the article, nor do I delete mainstream text. Because I am a neutral editor, completely unlike you.

Oh and by the way, I undid your revisions. Nice touch giving ”peacockery” as a reason for edit...

Misessus (talk) 12:15, 24 August 2008 (UTC)

"Classical political economy"

I will restore the fact tag on the meaning that inflation under "classical political economy" meant increasing the money supply. I would clearly identify Ricardo with "classical political economy", and the essence of the Bullionist argument was that the Bank of England had overissued bank notes and led to "the depreciation of banknotes." Hence the depreciation and the overissuance were linked but distinct.

Quoting from Economic Theory in Retrospect (pg. 129): "Ricardo led the bullionists with the argument that the Bank had overissued and this was the cause of inflation, or to use the language of the day, 'the depreciation of bank notes.'" Hence in classical political economy one (increase of the money supply) was (Ricardo argued) the cause of the effect (the depreciation of bank notes - which this source explicitly says was the term used for inflation in the modern sense). In these texts I do not see the use of the term inflation directly, nor support for the contention that the term was clearly used to denote only the cause.

The Bryan article (which I presume is the source of this contention, but if there is another text referred to, please provide it) does not appear to support the contention either. On the contrary, it summarizes David Hume as "The idea that changes in the money supply affect only the money prices of goods, not their value, was championed by many of the classical economists". Contrary to the current text in the "original definition", I see no reference to the use or meaning of the word in the 18th century.

Perhaps I have misunderstood, however, which source exactly you are intending to cite as the source for this claim: if so, grateful you specify (which is in fact the meaning of the cite flag).--Gregalton (talk) 06:51, 24 August 2008 (UTC)

Propose reorganise

I would propose to move the sections on effects and causes higher up (above the discussion of "originality"), and some other parts, as I believe this would be of interest to more readers. Comments welcome.--Gregalton (talk) 10:49, 24 August 2008 (UTC)

I can see some sense in doing this so long as it is not moved so far up that we start discussing causes and affects before we have clearly defined what we are talking about. That said, maybe this is not necessary if we improve the earlier sections. Here are a couple of other ideas for better structure:

• Original definition
• Related definitions

becomes:

• Definitions of inflation
  • Historical Definitions (or Early Definitions)
  • Current Definitions

and

• Causes of inflation
• Other theories about the causes of inflation

get merged as:

• Theories about the causes of inflation

Does this help? --DanielRigal (talk) 11:19, 24 August 2008 (UTC)

I'm not sure: frankly, there is actually no debate of any meaning about the definition, just some disagreement about the history, which is likely not of much interest to most readers.--Gregalton (talk) 11:29, 24 August 2008 (UTC)

I would agree with Daniel,

"Original definition" and "Related definitions" could very well merge into one, just as it remains perfectly clear what the original definition was.

Also, I think "Causes" and "Other theories" could merge, they're one and the same any way and the headline "Theories about the causes of inflation" is much more neutral.

Doing this would accomplish two very important things:

• It would make clear that the definition is in fact subject to various interpretation, namely the original and the modern one
• It would make clear that because of that disagreement regarding the definition, there are varoius theories as to what causes inflation.

All in all, very good ideas, Daniel. A third thing it is likely to accomplish is to make the article easier to live with for both sides of the proverbial fence.

Misessus (talk) 12:22, 24 August 2008 (UTC)

Reasons for paring down of text

The comment by Missesus reverted saying "unmotivated deletion of text". It was not unmotivated, and explained in edits. If detailed explanations in each case are required, here we go:

Section in "original definition": "Today, increases and decreases in the money supply mainly result from actions by central banks, and the effects of increasing the money supply are magnified by credit expansion, as a result of the fractional-reserve banking system employed in most economic and financial systems in the world. In contemporary economic terminology, these would usually be referred to as expansionary and contractionary monetary policies.".

This text has nothing to do with what the section is about, the original definition, which is easily expressed as "growth in the money supply" or "monetary inflation" (which is linked to). Expanding on the mechanisms has little to do with the definition.

Section 2: copyedits in "measuring inflation". Edited the text which read "represents inflation, according to the main stream definition. But we are usually more interested in knowing how the overall cost of living changes, and therefore instead of looking at the change in price of one good, we want to know how the price of a large "basket" of goods and services changes. " The article is about the mainstream definition, no need to repeat; the rest (the "we") is non-encyclopedic writing.

Section 3: removed "Holding true to their definition, the Austrian economists do not alter their method of measuring inflation, but strives to keep track of the growth what according to their view is the "true" money supply." Obviously if one's definition is the number of chickens, one would keep true to that definition and count chickens; again, no need to repeat again that if one had a different definition, one would measure under that definition. The article establishes quite clearly which definition is being used.

Section 4: removed "As noted, this definition of inflation is rejected by the Austrian School, which maintains that inflation is an excessive increase of the money supply, which in turn leads to a higher nominal price level, as the real value of each monetary unit is eroded and thus buys fewer goods and services. Austrian economists also believe that inflation sets off the business cycle (see Austrian Business Cycle Theory) and hold this to be the most damaging effect of inflation as artificially low interests rates due to exessive increases in the money supply that leads to overly ambitious investment, resulting in clusters of malinvestments, which has to be liquidated as they show their unprofitability." Repetition again. Since it is referring to a different definition, the effects presumably differ. Note this is also covered in the Austrian section below.

Section 5: Removed "This would constrain fractional-reserve banking ensuring that money supply growth (and inflation) would never spiral out of control." Excessively detailed, not factual (fractional-reserve banking is not mutually exclusive of a gold standard), and makes bold claims that are not presented as claims. (And of course, if one defines inflation as money growth, and one stops money growth by fiat - voila! no inflation. As defined.). Why does this text also have to refer to inflation (price growth) when that definition is explicitly rejected.

In general, most of this is just repetition and article content that should be - and, shockingly, is! - in the articles on Austrianism and related. WP:Undue to reiterate in every section that Austrians disagree with the generally accepted definition - there's no plot here, it's just not that relevant.

I will be reverting now that I have clarified the reasoning, as requested. Please note wp:3rr.--Gregalton (talk) 16:17, 24 August 2008 (UTC)

Section 1 The text was very relevant, as it briefly described the transition from history to the modern world. It is quite common and very logical to do so.

Section 2. Its about mainstream text, its all yours.

Section 3. As the Austrian view is expressed in all sections, it makes sense to have a note of the Austrian view in this as well.

Section 4. Nothing more than plain deletion of all Austrian text from the ”Effects of inflation” –section. Completely unwarranted, and therefore revoked.

Section 5 A full gold standard would severly hamper the banks’ ability to create their own credit, as they would have to be able to convert all their notes into gold. The fractional-reserve banking we have today relies on fiat currency and the Fed as the lender of last restort. Under a full gold standard, this would not be possible.

In general, all you’ve done is to delete Austrian texts, because you think it doesn’t belong in this article. Well I’m sorry you feel that way. However, the Austrian text does belong in the article and I have therefore reverted your revision. And as for it being repetitive, it is important to show that the Austrian School is consistent and what that consistency leads when it comes to debating the causes, effects and ways of controlling inflation. This illustrates the differences in the views on the subject.

Misessus (talk) 16:54, 24 August 2008 (UTC)

Austrian Economics is given Undue weight

I'm shocked at the state of this article. Austrian economics is a fringe theory, and references to it should not be littered throughout the article. It merits perhaps a paragraph or two, but certainly not the weight it is currently given. The page gives the impression that there are two equally strong and valid views on the subject, as if there are two strong an equally valid viewpoints on whether the earth is flat or round. This violates WP:FRINGE and WP:UNDUE. If you have doubts that Austrian economics is a fringe theory, just check out how many self-described Austrian economists there are on the faculties of accredited universities, and how many peer-reviewed papers are published by self-described Austrian economists in economics journals based in accredited universities.

I have moved paragraphs on the Austrian view to the section in 'other explanations'. I have not deleted any content. However, it is my opinion that the section on Austrian views is overlong and needs to be pared down. It should not be moved back into the lead. That would violate WP:UNDUE. lk (talk) 14:28, 5 September 2008 (UTC)

You can be as shocked as you want, the fact is that Austrian economics is the oldest continual school of economic thought. It is far from a fringe theory. In fact, it is the only major economic school that still treats econoimcs as a social science and recognizes the importance of other social sciences in the study of economics, most notably history.

I'll assume your just a sockpuppet of Gregalton. List all your WP dos and don'ts you want. I will not allow the ignorance of mainstreamers confuse ordinary people who are curious about this very important and current issue. Whenever someone like you tries to pull a stunt like this, I'll be here to restore the balance and scientific value to this sorely abused article.

Misessus (talk) 08:10, 6 September 2008 (UTC)

Regardless of whether it is old or not, I entirely agree that the Austrian school is overemphasized here. Since this article is about the generally accepted definition of inflation, the Austrian definition has little to do with this article. And it certainly doesn't need to be repeated throughout the article (given it has little to no relevance).--Gregalton (talk) 15:31, 6 September 2008 (UTC)

The Austrian school is highly relevant, as it is the only school that maintains the original definition of the word. Also, through the Ron Paul presidential campaign and the campaign for liberty, the Austrian school is drawing every more attention.

And by the way, the relevance of an economic school is not decided by its popularity with politicians and the media. —Preceding unsigned comment added by Misessus (talk • contribs) 17:16, 6 September 2008 (UTC)

I'll reverse my statement about WP:FRINGE when there are self-described 'Austrians' on the Economics faculties of accredited universities, or when self-described 'Austrians' publish in peer-reviewed journals not published by their own organization, or when 'Austrian' economics is taught to undergraduates in accredited universities. Until then, please excuse me for regarding it as on par with Alchemy, Creationism and Global warming denialists – those other schools of thought that also refute the validity of peer-reviewed scientific consensus in their field. lk (talk) 19:16, 6 September 2008 (UTC)

Try actually studying economics and economic history. When you realize that economic policies based marxism, keynesianism, neoclassisism and monetarism (the mainstream schools) have lead to economic disasters (Soviet Union, the Great Depression, runaway inflation of the 1970s, dot.com bubble and the present credit crunch), you way wish to rethink what schools should be equated to creationism.

I would say that the main problem with this article is that it has mainly been edited by people who are not economic scholars and are not at all familiar with the field itself. There are a growing number of Austrian economists teaching in universities today, many Austrian authors have published best selling books on economic history, the academic debate between Austrians and mainstreamers have been going on for a long time.

The Ludwig von Mises Institute has been up and running for 25 years and annually host the "Mises University", where the professors and scholars of the institute lecture on Austrian economics and economic history. The Institute arranges several major conferences a year and publishes a great amount of articles, series of lectures, books and journals.

The mere fact you compare the oldest school of economic thought to alchemy just goes to show how ignorant you are of the field of economics. So my question to you is:

What are you even doing here? The same question could be asked of some other "editors" active on this article.

Misessus (talk) 21:39, 6 September 2008 (UTC)

Calling other editors ignorant as you have above is a personal attack. Not following basic guidelines of politeness of any community calls into question your own presence here.--Gregalton (talk) 22:12, 6 September 2008 (UTC)

Dear Misessus, Do drop me a note when you have a PhD in economics from a major university. In the mean time, I think it would be helpful if you could enlighten us all about where you work (Mises Institute?) or if you have any conflict of interest on this issue. Because you surely behave as if you do. lk (talk) 04:27, 7 September 2008 (UTC)

"The Ludwig von Mises Institute has been up and running for 25 years . . " Witchcraft has been around a lot longer but it is not mainstream thinking. As a long time subscriber to "The Economist" magazine (albeit for the quality of its foreign news) and having formerly been a professional banker working in the City of London for over 20 years I think I would have heard of the Austrian School if it represented a mainstream line of thinking, one that academics and professionals take seriously. I haven't and I am therefore inclined to back those here that believe that the article should not give undue weight to this.--Tom (talk) 21:59, 7 September 2008 (UTC)

"The Economist" search for Friedrich Hayek, most prominent member of the Austrian school, returns 44 results, while same search for John Keynes returns 114 results. That is not so big difference. -- Vision Thing -- 16:17, 8 September 2008 (UTC)

The modern day 'Austrians' claim Hayek, but completely ignore his contributions. Instead they quote only with Mises and Rothbard. lk (talk) 19:40, 8 September 2008 (UTC)

LK

I would have thought it was quite clear by know that you are not qualified to make statements about Austrian economists. Hayek is generally still held in high regard among Austrians, but he is by no means thought to be the most prominent member. He has also been the subject of harsh criticism at times. For instance, Walter Block wrote a rather scathing critique of Hayek's "Road to Serfdom". As said, he is mostly respected for his work on monetary theory. Among other things, he has received much praise for his contributions to the Austrian Business Cycle Theory. As far as my claims of some editors' ignorance here, your statement above just made that claim a lot stronger. Please keep your comments to that of which you have some knowledge, whatever that may be.

Misessus (talk) 19:51, 8 September 2008 (UTC)

Gregalton

You have yourself admitted to having virtually no knowledge of the Austrian School, despite the fact its adherents include several award winning economists and best selling authors. I'm sorry, that is ignorance, and stating that is not a personal attack. I also notice you haven't had any issues with people equating the Austrian School to creationism, witchcraft and whatnot. A little bias in play, perhaps?

LK

I don't think anyone here is willing to divulge any personal information about himself, I certainly am not. I've stated my case for the Austrian School and my criticism of mainstream economics on this talk page. Feel free to contest any passage that I've written. As for the conflict of interest, it is not I who are constantly trying to close out other schools with the explicit purpose of promoting the mainstream view. You and others like you are, so the conflict lies with you, not me.

Tom

The fact that you as professional banker for over 20 years hardly does you credit in this debate, especially not considering the current credit crunch, which is the direct result of massive inflation and credit expansion, something for which the central banks and major commercial banks are to blame. The financial-industrial complex, which has been dominating economic and monetary policy both in Europe and the US, have always been a far greater threat to economic prosperity than the much more infamous military-industrial complex. In fact, it was the major US banks under the lead of JP Morgan who made sure that the Federal reserve system was created, completely contradictory to the Founding Fathers and the spirit of the Constitution. The European Centralbank has operated in the very same way as the Fed, continually pumping huge amounts of created credit into the European banking system. On December 18th 2007 alone, 349 billion euros was created and injected to alliviate the so called liquidity crisis. This crisis was of course the direct result of overlending by the banks, chuffing away its excess reserves to anyone who'd borrow it.

It is hardly any wonder that bankers are as unfamiliar with the Austrian School as the political class. The Austrian School calls for a full reserve banking system with commodity backed currency. Should this be implemented, the banks would lose all their current priviliges and thus the ability to make billions and billions in profit on credit that doesn't exist. Talk about conflict of interest. The bankers don't know about the Austrian Business Cycle Theory because they don't want to know about it. They want to continue in the same vein, despite the ever recurring crises, like the one we are experiencing today.

<inserted comment> Nice rant, but all I said was that the Austrian School is IMHO not mainstream. I happen to believe that the loose expansion of the money supply by the commercial banking sector eaager to lend and maintain or grow market share has been a major factor in the inflation seen in certain sectors (notably housing); but that fits a classic monetarist view. I am old enough to remember how the Bank of England constrained exessive growth in UK commercial sector lending in the late 70s (or was it the early eighties?) by applying a so-called "corset" which penalised banks for excessive balance sheet growth and which reined in UK inflation very effectively. The central bank role was to constrain the growth in M3 ; nobody as I recall blamed the central bank for being the underlying creator of inflation. It was more or less expanding the supply of near money to meet demand. But this is getting us off the main topic of whether Austrians are mainstream or not. I still say not. --Tom (talk) 21:29, 8 September 2008 (UTC)

Tom

You equated the Austrian School to witchcraft and tried to draw authority from your claim of 20 years in the banking business. I merely showed your error on both points.

I suggest you read a little Austrian material. The expansion of the money supply within in the banking sector is a direct result of the fractional-reserve banking system, something Austrians have always been very critical of, precisely because FRB leads to credit expansion. Inflation means increasing the amount of units of currency. That happens both when the central bank creates new credit out of thin air and injects into the banking system, and when that credit is multiplied by the commercial banks. Austrians have been talking about this for a hundred years or so, long before anyone had ever thought about the monetarist school. The central banks and the FRB commercial banks go hand in hand. Without the former, the latter wouldn't work and without the latter, the former wouldn't be able perform its main function as effectively.

But one thing we do agree. The Austrian School does not belong to the modern mainstream schools. However, up untill the arrival and later dominance by the neoclassisists and keyensianists, the Austrian school was what one could call mainstream. Of course, the term "mainstream" wasn't really established back then.

Misessus (talk) 20:49, 9 September 2008 (UTC)

Vision Thing

Friedrich Hayek was by no means the most prominent member of the Austrian School. Ask any Austrian, and he'll name several economists who are considered more prominent. Ludwig von Mises is undeniably the foremost Austrian economist, arguably followed by Murry Rothbard. Carl Menger, the founder of the Austrian School is naturally held in high regard, as is Eugen Böhm-Bahmwerk and Henry Hazlitt. Hayek is mostly respected for his work on monetary theory and business cycle, and his criticism of JM Keynes. An interesting tidbit is the fact that Hayek, after having torn Keynes' early works apart, didn't even bother to read Keynes' "General Theory". According to Hayek, Keynes wasn't even worthy of being called an economist. And when you look at New Deal, which was largely based on Keynesian theory, it is hard do disagree with Hayek. However, Keynes was naturally popular with the political class, which is the only reason why he has had such an impact on the profession. As an economist, however, he was utterly dismal and has the dubiuos honor of being responsible for the greatest economic disaster in Western history. The only economist who surpasses Keynes in the history of mankind when it comes to causing human suffering is Karl Marx.

Misessus (talk) 16:45, 8 September 2008 (UTC)

Misessus, your explanations above sound very much in the vein of righting great wrongs, that the majority of economists, the media, the politicians, and the bankers are all terribly wrong and doing great damage. Whether you're right or wrong, that's explicitly not what should be in WP articles. As for Hayek, he's the number one reason I'm hesitant to call the Austrian school "fringe", because outside a narrow cadre of Austrians and libertarians he's by far the most prominent Austrian. CRETOG8(t/c) 18:31, 8 September 2008 (UTC)

(P.S. One thing which I remain fuzzy on is how much of an "Austrian" Hayek really was. For instance (following your comments above), I gather Hayek was less likely to support full-reserve banking and more likely to support its near-opposite "free money", unregulated competing currencies.) CRETOG8(t/c) 18:39, 8 September 2008 (UTC)

Creto

Consider the Wall Street crash of 1929, a direct result of enormous inflation during the 1920s (the money supply increased by an estimated 70 percent). The crash was one of the most, if not the most devastating economic disaster in the history of the US, and is still a legendary historical event. Millions of people lost all their savings, their businesses, their entire wealth, ending up indebted for life. Thousands committed suicide.

After the crash came the Great Depression, a period of immeasurable human sufffering which lasted for a full 15 years. No depression had ever lasted that long, not even close, nor has anyone come close to that in later years. Have you ever heard of the depression of the 1920s? You know, there was one, a post war depression. However, it didn't last for more than a year or so, because the politicians didn't try to fix it. Hoover and FDR went the opposite way their New Deal. We all know how that turned out.

And to that the recurring economic crises is the US alone after the Great Depression finally went away. Most notably the runaway inflation of the 1970s, the dot.com bubble in 2000 and now the housing bubble. They all stem from the same cause: massive inflation and credit expansion. And who are the culprits? The ones who create the money (the Fed), the ones who uses the money to fund budget deficits (the State) and the ones expand the credit, thus multiplying the detrimental effect (the commercial banks). And when the banks go bust, who bails them? The politicians, using either taxpayer money or created money from the Fed.

So who ends up paying for it all? The general public, both through increased taxes and through eroded money. Austrian economists have throughout the 20th century and now in the 21st century tried to make people aware of this fact.

However, I challenge you to find one single passage in the inflation article that even comes close to suggesting that the politicians and the bankers are out to make a profit by exploiting the ordinary person. All Austrian text serve no other purpose than giving the Austrian view, no more, no less. Why you or anyone else should have a problem with that is beyond me. Thus far, I have been given no other reason than the explicit desire to promote the mainstream view and make all other views obscure, preferably not appearing at all. That is a great shame and a huge embarassment for the whole WP community, one I'll be sure to expose.

About Hayek. Among Austrians, he is far from being considered the most prominent. And for good reason, because though he undeniably was an Austrian, his views on some subjects did differ from other Austrians (e.g. Mises and Rothbard). Perhaps the very fact that he was given the Nobel Prize (which he shared with his acedemic and ideological counterpart), a prize given by the Swedish National Bank and thus prone to favour mainstream econmists, is the clearest indication of him not being "as Austrian" as other Austrian economists.

Misessus (talk) 19:00, 8 September 2008 (UTC)

Specifics of inflation should probably remain here, but I'm going to suggest we concentrate the general discussion on Austrians at Wikipedia_talk:WikiProject_Economics#Input_requested_regarding_Austrian_School.--CRETOG8(t/c) 16:57, 9 September 2008 (UTC)

Problems with this article

There are many.

First, I agree with the above that the Austrian view is over represented. Like it or not, these days the Austrian School is a fringe school. Of course they should be mentioned (as should non-monetary theories of inflation) but this insistance on always emphasizing that inflation = increase in money supply is too frequent. Second, in the lead the statement that ""Keynesians" argued that real demand was often more important than changes in the money supply" is inacurrate and misleading. Certainly there were some who took this view, as there were those who emphasized supply side factors. But there were also many Keynesians who agreed that inflation was caused by excessive monetary growth (Tobin for example). In general I'd say that the mid century Keynesians just didn't pay that much attention to inflation (standard Keynesian Cross type models just assume fixed price levels). So I don't think that this representation of "Monetarists" vs. "Keynesians" is correct.

In the "Effects of Inflation" section the effect "a company tries to gauge and combat the costs of inflation" is not an example of rent seeking, rather just a straight up example of distortion of economic activity.

In "Other theories about causes of inflation" section the statement "Supply-side economics asserts that the money supply can grow without causing inflation as long as the demand for balances of money also grows." is problematic. First, "supply side economics" isn't really a school of economic thought. Second, this statement - that if demand for balances grows as fast as money supply then inflation does not result - doesn't apply just to supply side economics but also to Monetarism and most mainstream views. In an economy with increasing incomes the problem is excessive monetary growth not just monetary growth per se (hence, something like Friedman's 2% rule)

In addition the organization of the article is very poor.radek (talk) 01:23, 7 September 2008 (UTC)

Your observations are correct of course. Our time would be better spent fixing those problems rather than arguing about definitional issues. However, that is the problem with the 'Austrian' fringe on wikipedia, their continual harassment hinders progress towards better quality economics articles. lk (talk) 04:35, 7 September 2008 (UTC)

Radeksz, your contributions and assistance would be helpful. There have been a number of reasons on this article that attempts to improve things have got sidetracked, so new eyes would be great.--Gregalton (talk) 07:38, 7 September 2008 (UTC)

Proposed name change

Much of the argument appears to be about definitions, not about content. As far as I'm concerned, that's just a waste of time. As per Wikipedia:Naming conventions (precision), I suggest we move this page to Price inflation, so as to avoid any ambiguity. We can then replace Inflation with a disambiguation page leading to Price inflation, Monetary inflation, Inflation (cosmology), etc.... Let the user decide. lk (talk) 05:46, 7 September 2008 (UTC)

I disagree that this should be renamed. This is, as documented, the most common use of inflation, and there are disambiguation links in the first paragraph. The very first sentence says "inflation or price inflation".

The "users" of the English language have already decided, and I don't see how or why "other" definitions should be given any more prominence.--Gregalton (talk) 07:42, 7 September 2008 (UTC)

The same idea of renaming the articles occurred to me a while ago and I suggested it to Gregalton, who didn't think it was necessary. I can see both points of view on this. On one hand, the disambiguation links at the top should be perfectly sufficient, and I don't think we should be bending the structure of Wikipedia just to keep a few difficult people happy/quiet, but it may be that renaming makes things more manageable generally and offers a more logical structure to the average reader. The disambiguation page would need to be very clear that when people use the phrase "inflation" without qualification it nearly always means that they are talking about price inflation. --DanielRigal (talk) 09:51, 7 September 2008 (UTC)

I have edited the inflate disambiguation page in line with this discussion.--Gregalton (talk) 10:09, 7 September 2008 (UTC)

Lead

Wikipedia's guideline on lead sections says: The lead section should briefly summarize the most important points covered in an article in such a way that it can stand on its own as a concise version of the article. Current version fails to do that. -- Vision Thing -- 09:19, 7 September 2008 (UTC)

What do you think is missing?--Gregalton (talk) 09:25, 7 September 2008 (UTC)

Are you kidding? What is missing is any mention of other explanations and definitions of inflation. -- Vision Thing -- 09:57, 7 September 2008 (UTC)

Very first sentence - before the lead - reads "For increases in the money supply or debasement of the currency, see monetary inflation." That is a different definition. The lead directly and prominently indicates that changes in the money supply are generally agreed to lead to high inflation. So could you be more specific?--Gregalton (talk) 10:01, 7 September 2008 (UTC)

Lead should be "a concise version of the article". This article has sections on Austrian and other views on inflation that are not summarized in the lead section. -- Vision Thing -- 10:05, 7 September 2008 (UTC)

Insufficient reading of wp:lead, which also states "The emphasis given to material in the lead should roughly reflect its importance to the topic according to reliable, published sources." Wealth of mainstream economic literature rarely, if ever, refers to Austrian views. You may be correct in that the article has too much info on Austrian views, however.--Gregalton (talk) 10:08, 7 September 2008 (UTC)

Of course, we should first determine what are today's mainstream views on inflation. In doing so I believe that we will find that Keynesian view is overrepresented in this article. -- Vision Thing -- 10:46, 7 September 2008 (UTC)

For what mainstream views are, and what it is appropriate in an article, I think we can refer to WP:SOURCES. The preferred hierachy of sourcers are:

1. Peer-reviewed journals and books published in university presses
2. University-level textbooks
3. Magazines, journals, and books published by respected publishing houses
4. Mainstream newspapers

Special note should be made of WP:SPS, in general self-published sources are not acceptable, except when used as sources about themselves. Since 'Austrian' economists are seldom, if ever, published by anyone other than their own organization, almost all related documents are 'self-published'. This makes their writings unreliable sources about anything apart as a source for describing what 'Austrian' economists are and what they say. lk (talk) 11:01, 7 September 2008 (UTC)

I would also note that the use of the term "Keynesian" in this article is excessive, and seems to be used with some pejorative connotations, for concepts and arguments that are central to virtually all of mainstream economics. So, the term Keynesian may be over-used, but not necessarily the concepts.

Of course, I can find Keynes and Keynesian in almost any economics textbook, but rarely (if ever) Austrian sources or concepts.--Gregalton (talk) 11:18, 7 September 2008 (UTC)

Lawrencekhoo, it seems that you have misconception about importance and influence of Austrian school. They are not completely inside a mainstream but they are also not so fringe as you are trying to describe them. -- Vision Thing -- 12:18, 7 September 2008 (UTC)

That should be judged on the basis of each relevant part. As for how it relates to this article, one editor claims that the Austrian definition of inflation is different. Which is okay as far as it goes, but if so, their comments on monetary inflation have little to do with price inflation. It has been quite clearly established that the definition of inflation as used by almost everyone coincides with price inflation. Apart from being a semantic argument, it's an attempt to promote a specific, non-mainstream point of view in an article that is not about Austrian economics.

For analogy, it makes me think of the argument over abiogenic petroleum origin: the article on petroleum limits discussion of the abiogenic theory to essentially one paragraph, because it is most decidedly not the consensus, accepted view on the issue. That theory is rightly discussed in detail on the page dedicated to the theory.--Gregalton (talk) 12:38, 7 September 2008 (UTC)

Gregalton

Price inflation and monetary inflation are two very different things, on that we can agree. Also, none of them are synonym with inflation. Someone suggested that inflation should be disambiguated into the various forms of inflation, such as price and monetary. The origins could be left in the inflation article, with reference to the current dispute of the definition. Thus, everyone would first see what inflation originally meant and the be able to move on to the more current articles. This would illustrate the outspread and ongoing debate. And as Vision Thing already noted, not even the mainstreamers agree. Not even all Keynesians agree, not to mention the monetarists and neoclassisists.

This is an encyclopedia and it should give truthful information, not politically angled information. —Preceding unsigned comment added by Misessus (talk • contribs) 17:11, 8 September 2008 (UTC)

I agree that they are two different concepts, but in fact the references and sources clearly demonstrate that price inflation is the meaning commonly assigned to inflation at present. That is not in dispute. The article also disambiguates the two meanings before even the lead. I don't know what you're claiming mainstreamers disagree on, but the basic definition is increase in the general price level. You seem to be the only one claiming that this is politically "angled."--Gregalton (talk) 08:45, 9 September 2008 (UTC)

If you read the article, you get the idea that there's as much consensus of inflation meaning increased money supply as normal price inflation. And still, the claim was not sourced, which again isn't that surprising, because there really doesn't seem to be any, which is also the picture you get when you read the article.

As for politically angled. When people explicitly state that a certain view should be promoted, and that view is the one favoured by the political class, the article becomes politically angled. Reading through the talk page, you'll find that I'm far from the only one who thinks this article has been subject to severe bias. The problem is that you've had most of the others blocked or removed from WP. Speaking of political angle...

Misessus (talk) 20:54, 9 September 2008 (UTC)

Dispute Flag

Vision Thing has added a dispute flag. I'd be grateful if you could clarify which points you believe are disputed.--Gregalton (talk) 13:48, 7 September 2008 (UTC)

Don't you argue that this article gives undue weight to the Austrian school? -- Vision Thing -- 16:17, 8 September 2008 (UTC)

It certainly was a problem. This WP:FRINGE group got a run in just about every section of the article. I've made some changes in line with WP:WEIGHT.JQ (talk) 21:04, 8 September 2008 (UTC)

The Austrian school is not a fringe school by Wikipedia's policies. I think it would best to centralize this discussion at WikiProject Economics. -- Vision Thing -- 07:54, 9 September 2008 (UTC)

Thanks for clarifying what the flag was for.--Gregalton (talk) 08:48, 9 September 2008 (UTC)

JQ made some changes to weight as noted above. Has the issue been sufficiently addressed to remove the POV tag, or are there additional issues? If there are additional issues, please point to specific issues that are actionable within the content policies so others can address the issue. Thanks Morphh ^(talk) 15:06, 09 September 2008 (UTC)

Revising the article

I rewrote portions of the 'Effects of Inflation' sections. I also took out this lengthy portion (which I'm putting here for now):

"Many prices are "sticky downward" and tend to creep upward, so that efforts to attain a zero inflation rate (a constant price level) punish other sectors with falling prices, profits, and employment. Efforts to attain complete price stability can also lead to deflation, which is generally viewed as negative because of the downward adjustments in wages and output that are associated with it. In addition, if deflation means that goods are likely to be less expensive in monetary terms in future (that is, the value of the currency unit is rising), consumers have an incentive to delay purchases, which will in turn contribute to further reduction in the economy, potentially resulting in a liquidity trap. In contrast, with high inflation, consumers have the incentive to spend money as soon as possible, contributing further to inflation. In technical terms, high inflation may increase the velocity of money, while deflation can lower it, in each case impacting inflation more than the underlying changes in the money supply. Hence, moderate levels of inflation are generally considered less harmful than either high inflation or deflation.

With inflation, the price of any given good is likely to increase over time, therefore both consumers and businesses may choose to make purchases sooner rather than later. This effect tends to keep an economy active in the short term by encouraging spending and borrowing, and in the long term by encouraging investments. But inflation can also reduce incentives to save, so the effect on gross capital formation in the long run is ambiguous.

Inflation is also viewed as a hidden risk pressure that provides an incentive for those with savings to invest them, rather than have the purchasing power of those savings erode through inflation. "

My reason for doing so is that I do not want the article to be too long. Hence in the 'Effects of Inflation' section I opted mostly a bulleted list. Some of the above is already covered in that list. Some of that which is not I plan on adding in shortly. Any comments and suggestions are welcome.radek (talk) 22:39, 7 September 2008 (UTC)

The lead and the article in general

LK

Firstly, the term mainstream economics has been used for decades by all schools of economic thought. This talk page alone is littered with the expression and it is also used throughout Wikipedia.

Secondly, as noted not even the Keynesians agree on the defintion of inflation. The whole reason for there even being a debate is that there are so many conflicting views on what inflation is, what causes it, what effects does it have and how can it be controlled.

Of all the amazing things you've claimed and said thus far, these two definately take the prize.

Misessus (talk) 19:34, 8 September 2008 (UTC)

You make a strong claim there, please back it up with at least one citation from a peer-reviewed journal article or an economics textbook. As far as I know, undergraduate text books (of which I own several, free desk copies ;-)) all agree on the definition of inflation, and also about the long run causes. There is no dispute (except with 'Austrians'). lk (talk) 19:50, 8 September 2008 (UTC)

Of course the term 'mainstream economics' is well established. My point about the lead is that it is inappropriate in wikipedia articles to preface the name of the science with 'mainstream'. Eg, in the article about General relativity, physics is not prefaced 'mainstream physics'; in Evolution biology is not refered to as 'mainstream biology'. The terms exist, but it is inappropriate to use them in the lead. lk (talk) 19:57, 8 September 2008 (UTC)

The debate started when the some mainstream economists started to redefine various terms within the field of economics. As the lead stated before (and again somewhat oversimplified), keynesians and monetarists disagreed and still disagree on what inflation really is. The neoclassisists, who for some reason are completely ignored on this article, also offered their own view.

As for the undergraduate books. Yes, I've read different definitions in those as well. Then again, I've read undergraduate books and peer reviewed articles stating that the cartels in the late 19th century was responsible for lowering production and thus increasing prices in industries such as steel, oil, salt and other major industries. This "fact" led up to the Sherman Act of 1890. However, statistics show that the level of production in the 17 industries which were claimed to be cartel controlled, in fact had risen by many times the national average, and that the price had halved in some of them. That truth is not told in any textbook, of course.

I've also read books claiming that the New Deal and WWII lifted America out of the Great Depression, that Andrew Jackson was the forerunner of the New Deal policies and that slavery was the cause of the American Civil War. So you'll excuse me for not putting too much faith in the alleged textbooks on your desk.

As for the mainstream term. Physics and biology are hardly comparable, as the term "mainstream physics" is hardly as established as mainstream economics, if established at all. That is another difference between natural sciences and social sciences. In the former, you have to be able to prove you're right, and it is much easier to do so since empirical evidence is both possible and widely accepted. In the latter, all you need to do is to make friends with politicians. Your theories can be complete bollocks, such as Keynesianism and Marxism, but if you're well connected, that is what will be taught in the universities and what the economic policies will be based on. Tragic yes, but all too true.

Misessus (talk) 20:14, 8 September 2008 (UTC)

Anyone can claim anything. Citations, or it didn't happen. lk (talk) 20:35, 8 September 2008 (UTC)

Yes, you've proven to be quite capable of making extraordinary claims without citing them.

Within the economic profession, there has been an ongoing debate on inflation, competetion, anti-trust, eminent domain, externalities and several other subjects. As far as general consensus goes, it is actually quite rare in any social science, especially when compared to the natural sciences.

And as far as citations go, you didn't source your claim either. And how could you, how could anyone prove a "general consenus" on a topic that is so eagerly debated?

Misessus (talk) 20:42, 8 September 2008 (UTC)

Edit War

And the constant stream of incredible claims keep on flowing.

LK, you're accusing me of edit warring. Pray tell, what do you call what you've been doing on this page? Completely arbitrary edits, knowing full well they don't hold and that I will reverse them, only to scream three revert rule. Just how low are you going here?

Misessus (talk) 20:38, 8 September 2008 (UTC)

Monetary inflation

The article Monetary inflation appears to be a straightforward POV Fork of this one. It should be deleted or merged in here.JQ (talk) 22:05, 8 September 2008 (UTC)

Leaving aside any POV issues, my understanding is that monetary inflation is a quite separate thing and probably does not belong here. While the money supply affects prices it is possible for each to inflate or deflate separately. Merging here would only add to the misconception that there is only one sort of inflation and that there is disagreement as to what its true nature is, when almost everybody accepts that there are two different phenomena here, both of which are meaningful and valid.

If it should be merged anywhere, monetary inflation would seem to belong in Money supply.

As an aside, in the UK at least, it is most common to describe monetary inflation/deflation as "expansion" or "contraction" of the money supply rather than inflation or deflation, although both terminologies can be used and understood.

--DanielRigal (talk) 22:39, 8 September 2008 (UTC)

It is generally accepted that if asked what the inflation rate was in a particular year in the past in a particular country, we will be given one number: the CPI rate for that year for that country.

TaGR (talk) 23:14, 8 September 2008 (UTC)

What is a Fork?

TaGR (talk) 23:26, 8 September 2008 (UTC)

I would prefer to keep the monetary inflation article (which is, credibly, a separate concept) but reduce the fork-ish aspects and hold it to a far higher standard.--Gregalton (talk) 02:02, 9 September 2008 (UTC)

TaGR: see wp:POVFORK.--Gregalton (talk) 02:03, 9 September 2008 (UTC)

I've gone and edited the other article, mainly removing more repetition of the Austrian theory. There isn't a whole lot left after that.

You were quite right, JQ, the article was basically a POV fork. I still would prefer to keep it separate, however.--Gregalton (talk) 02:14, 9 September 2008 (UTC)

OK, that's a huge improvement and there's enough for a separate article, even if a bit stubby. I've removed the tagsJQ (talk) 05:10, 9 September 2008 (UTC)

Reverted wholesale by visionthing including tags. Grateful another editor takes a look at monetary inflation, which, in its current state, is just a povfork.--Gregalton (talk) 08:47, 9 September 2008 (UTC)

References

Does anyone have some reliable books we could use to generically use as a reference for a bit of the non-footnoted content in the article. If so, please create a Reference section under Notes, and add it in bulleted format. Morphh ^(talk) 17:30, 09 September 2008 (UTC)

Anyone object to Mankiw's Macroeconomics? I also have Farmer's Macroeconomics, and (you guessed it) Macroeconomics by Abel & Bernanke. lk (talk) 09:08, 11 September 2008 (UTC)

I've added Mankiw and Abel & Bernanke, in the comments I note the relevant chapters. Please use to cite liberally throughout the article. lk (talk) 10:26, 12 September 2008 (UTC)

Inflation in the long run

My understanding is that there is general consensus that in the long run, inflation is caused by money supply increasing faster than the growth rate of the economy. I.e. inflation = growth money supply - growth economic activity. Someone keeps editing this statement out of the lead. Is this controversial?

Unless there's something I'm not aware of, it seems to follow cleanly from MV = PY, as changes in M and Y dwarf changes in V in the long run. ie. velocity does not significantly grow or shrink forever. lk (talk) 09:04, 11 September 2008 (UTC)

It doesn't follow logically, since it could be that changes in P cause changes in M, for example. Identities can't imply causation. Nonetheless, I think it's generally agreed.JQ (talk) 10:33, 11 September 2008 (UTC)

I haven't noticed the edit on this, but agree. (There was a bit of back-and-forth some time ago, which recurs frequently, about how money supply growth = inflation, without any qualification such as "in the long run" or recognition of velocity - which makes all the difference).--Gregalton (talk) 10:51, 11 September 2008 (UTC)

The rate of inflation is simply measured by the growth of the money supply. However, the "net inflation", can indeed be measured as the growth of the money supply - increased production.

In the 1920s, the money supply in the US grew an estimated 70 % from 1920 to 1929. However, as the production increased so dramatically during the same period, the price level was relatively stable. The real downside of the runaway inflation was of course the crash of 1929, when all the bad investment that was made based on the created and expanded credit showed its unprofitability.

The crash spelled the end for neoclassisist Irwing Fisher's carreer and reputation as the foremost economist of the day, as he stated only weeks before the crash that no crisis was on the horizon. Naturally, he never regained his elevated position among economists after that. In sharp contrast to this incredible blunder, both Mises and Hayek warned years before the crash that the monetary policy would lead to disaster, basing their prediction on what would become known as the Austrian Business Cycle Theory. In the spring of 1929, Hayek stated that an economic collaps was imminent.

However, instead of heeding the advice of the Austrian School economists, presidents Hoover and FDR opted for Keynesianism. Their economic policy program, New Deal, was almost completely based on Keynesian theory. Its implementaion lead to the longest, deepest and most devastating depression in the history of the Western world. Only when the government started to abolish New Deal policies following the death of FDR, did the economy start to recover.

Therefore, it is very dangerous to confuse inflation with "net inflation". If anything, the Wall Street crash made that crystal clear.

Misessus (talk) 18:09, 11 September 2008 (UTC)

Misessus, I think you are fundamentally confused about the nature and purpose of Wikipedia. It is NOT a place to carry out ideological disputes, post one's opinions on various subjects or engage in original research and speculation. If you want to do that, start a blog. Wikipedia is an encyclopedia, and while some discussion on the nature of context is necessary on these talk pages, they are not meant to be a forum for a particular editor's opinions.radek (talk) 18:37, 11 September 2008 (UTC)

Yes they are, if you are of the right opinion. That has become crystal clear.

Misessus (talk) 20:51, 12 September 2008 (UTC)

3RR violation

I note a further violation of WP:3RR by Misessus, and a continued pattern of repeating the same reverts. I suggest that it's time for this user to stop or be blocked. JQ (talk) 18:55, 11 September 2008 (UTC)

If you could, please file a report at Wikipedia:Administrators' noticeboard/3RR. Since I have previously blocked that account for 3RR, it might be best if a different administrator were to handle it this time. Thank you. — Satori Son 19:03, 11 September 2008 (UTC)

Never mind - report already filed. An administrator should respond to it soon. — Satori Son 19:07, 11 September 2008 (UTC)

Suggestions to break the edit conflict

This conflict seems to be in regard to undue weight, along with an argument of fringe. It appears we agree that the viewpoint should be included, just dispute placement and weight. I think we can agree that it is a minority viewpoint on this particular topic. So the weight should proportional. This, however, does not mean that a complete understanding of that viewpoint should be excluded from Wikipedia - we strive to be comprehensive. The viewpoint can be expanded in an article about that minority viewpoint. So this article should maintain proper weight for the topic, but the Austrian School view on inflation can be further detailed in the Austrian School article or a sub-article particular to the Austrian view on inflation. There is currently a section already in the Austrian School article Austrian_School#The_Austrian_View_of_Inflation. This could be expanded with all the content that is being disputed here for inclusion in this article. This article would contain a summary (with a details, main, or see also link for more information), with the main bulk of the viewpoint (and criticism of the viewpoint) contained in the Austrian School article. So if anyone wants to read more about that viewpoint, we've maintained those details on the article about that viewpoint. Morphh ^(talk) 21:36, 13 September 2008 (UTC)

I agree entirely. The amount of information in this article on the Austrian approach is out of proportion, and it is largely repetition of what is in the Austrian economics article.--Gregalton (talk) 11:20, 20 September 2008 (UTC)

I made this change. The Austrians can go nuts on the Austrian School article and may eventually split that section into an article of it's own, but at least in this article it is in proper context and provides direct reference to the details for those that want to learn more about that viewpoint. Morphh ^(talk) 15:16, 20 September 2008 (UTC)

technical header

{{technical}}

This may have to be added to the discussion header.

The whole aspects of this article may seem too technical for the general audience.

http://en.wikipedia.org/wiki/Wikipedia:Make_technical_articles_accessible

88.105.91.219 (talk) 15:53, 19 September 2008 (UTC)

This article is too technical for the general public to grasp. It should be simplified and summarised for the public to understand it.

SystemicDestruction (talk) 18:27, 20 September 2008 (UTC)

[Image:World Inflation rate 2007.PNG]

I'm having problems with the different inflation rates in the European countries, particulary the E.U.

Shouldn't the Eurozone considered to be a single region (with a single colour), where they use the same currency, the euro?

88.105.91.219 (talk) 15:58, 19 September 2008 (UTC)

Article structure and expansion tags

I was looking at the article structure and the title "Other theories about the causes and effects of inflation" jumped out at me as something that should likely be a sub-section of "Causes of inflation" or "Effects of inflation". Does it concern anyone that putting certain sections under this "Other theories..." title may violate WP:NPOV#Article structure by minimizing viewpoints in the structure. I agree with proper weight, but we're sectioning these views off and effectively saying, these viewpoints are "theories" (compared to the others which is stated more factually as causes or effects) and pejoratively implying they are "wrong" since their not the mainstream view, which would violate NPOV. Shouldn't all the cause or effect theories fall their respective section, providing weight as appropriate to each sub-section or viewpoint?

There are a couple of expansion tags out there on gold standard and fixed exchange rates but I see no discussion on the talk. What is the goal with these (2-3 paragraphs?). It is a summary style so it is intended to by limited. Do we need these tags? Can we copy the additional needed text from the main articles to satisfy whatever expansion is requested with these tags? Morphh ^(talk) 15:59, 20 September 2008 (UTC)

Pennysaver

I was just trying to clean up your contributions. I didn't delete anything, just rearranged and presented in a slightly different way. You shouldn't take it personally when someone else edits your work. lk (talk) 19:12, 21 September 2008 (UTC)

This is what you deleted: "Similar items, for example profits and losses retained in companies, are not inflation-adjusted which result in the erosion of their values by inflation."

PennySeven (talk) 19:21, 21 September 2008 (UTC)

You do not seem to understand that it is generally accepted that the real value of retained profits and losses are eroded by inflation. PennySeven (talk) 19:26, 21 September 2008 (UTC)

You state in the article: "This means that the real value of a fixed nominal sum will depreciate over time. Similarly, prices (including rents and wages) are eroded if they are not inflation-adjusted." I agree with you. Retained profits and losses are also fixed nominal sums that will depreciate over time. Similarly, prices (including rents, wages, retained profits and retained losses) are eroded if they are not inflation-adjusted. PennySeven (talk) 19:31, 21 September 2008 (UTC)

I've removed this sentence from the lead:

Similar items, for example profits and losses retained in companies, are not inflation-adjusted which result in the erosion of their values by inflation.

There's nothing in the rest of the article to support it, and it appears to me to be OR. Before adding it back, first, some significant discussion of the effect of inflation 'profits and losses' needs to appear in the main text. And second, it needs to be cited by a high quality reliable source. lk (talk) 03:24, 22 September 2008 (UTC)

Cost of Living Adjustments

Just a note, we need a section on COLA's, Cost of Living Adjustments.

Otherwise this section in the lead is just orphaned:

This means that the real value of a fixed nominal sum will depreciate over time. Similarly, prices (including rents and wages) are eroded if they are not inflation-adjusted. To maintain their real value, nominal wages have to be updated at the rate of inflation. Therefore, in many economies, salaries, wages and other regular payments are adjusted for inflation, to keep their real values constant.

lk (talk) 19:47, 21 September 2008 (UTC)

Added COLA section. Morphh ^(talk) 2:14, 22 September 2008 (UTC)

Thanks Morphh! You're a veritable tsunami of edit cleanups, and I mean that in the best way. lk (talk) 03:22, 22 September 2008 (UTC)

The COLA text in the lead now has to be reduced.PennySeven (talk) 11:54, 22 September 2008 (UTC)

Views and theories

Our lead to the causes of inflation stated that "There are different schools of thought as to what causes inflation. Most can be divided into two broad areas: quality theories of inflation, and quantity theories of inflation." Yet we had no main subsection for either of these two broad areas. It would seem these should be the first two sections. The Monetarists view seemed to be mainly Friedman's restatement of the "Quantity theory of money", so should this section just be retitled to "Quantity theory of money" with a wikilink to Monetariasts in context? What is more notable - the theory or the view...? I'm trying to be bold with a little restructure, but I'm not as familiar with the particulars. We don't have much on Quality theory.. how does the Keynesian view fit in with it's sub triangle theories. I'd like to make the "Causes" section more about the theories with additional points regarding the schools of thought that support or combine the theories - a theory may be a school on it's own but perhaps not.. Morphh ^(talk) 1:47, 22 September 2008 (UTC)

I think the causes section needs some restructure. Are not the Demand-pull and Cost-push more widely held views than the Keynesians? Is Quantity theory of money more widely held than the Monetarists? It seems odd that we've grouped this by economic schools of thought unless they are they only school that holds the view. It seems we should group the theory and attribute who holds it, instead of grouping who holds certain views. Would it not be more appropriate to have each of the triangle causes as their own section, with perhaps notes regarding what schools created or support the theories? Looking for suggestions or criticism of this model. Morphh ^(talk) 13:50, 23 September 2008 (UTC)

See also

I think we have too many see also links. Can we work to reduce these to only the most closely related subjects of interest. We don't need a mutli-section link farm. Morphh ^(talk) 2:45, 22 September 2008 (UTC)

According to the manual of style, 'see also' links are only for links that have not already been linked to in the text. These link should eventually be worked into the text and the see also section removed. lk (talk) 07:29, 22 September 2008 (UTC)

Lead length

The lead has a lot of good info but it is too long now. Three to four paragraphs per WP:LEAD. So we need to do some trimming and merging of paragraphs. Morphh ^(talk) 15:40, 22 September 2008 (UTC)

Looks much better now. Thanks to all that helped clean it up. Morphh ^(talk) 13:03, 23 September 2008 (UTC)

Fixed monetary values etc (Pennyseven)

I trimmed the following attempt to provide a reference: "Erosion of fixed non-monetary accounting values: The real values of issued share capital, share premiums, capital reserves, trade debtors, trade creditors, profits and losses retained in companies are eroded by inflation. Ref: International Accounting Standard IAS 29 Par 5: General forces may result in changes in the general level of prices and therefore in the general puchasing power of money. Par 6: In most countries, primary financial statements are prepared on the historical cost basis of accounting without regard either to changes in the general level of prices or to increases in specific prices of assets held, except to the extent that property, plant and equipment and investments may be revalued. Par 12: Monetary items are money held and items to be received of paid in money. Par 14: All other assets and liabilities are non-monetary."

I'd like to see a reference that makes the point above (preferably in the proper ref form). This seems to me to be synthesis, making conclusions from the IAS that don't correspond more accurately with what the claim is here.--Gregalton (talk) 14:49, 24 September 2008 (UTC)

How about the source below. Here is a article by the author "Should the Audit Report specify the real value destroyed in Retained Income by the global implementation of the Stable Measuring Unit Assumption?" that references his paper below. I don't think the web post would be considered a reliable source, since it's a blog post, but I think the paper published on the SSRN would be.

• Smith, Nicolaas J. (2006-11-23). "Real Value Accounting - The Next Step in Our Fundamental Model of Accounting". Social Science Research Network. Retrieved 2008-09-24. Morphh ^(talk) 15:12, 24 September 2008 (UTC)

IMO, something about the effect of inflation on accounting values is OK in the body (properly cited of course), but it shouldn't be in the lead, cause of WP:UNDUE. This is a topic that concerns very few people and that isn't discussed in most text books. lk (talk) 15:41, 24 September 2008 (UTC)

I agree with lk. This seems like a very minor point with regard to the article as a whole and probably doesn't deserve mention in the lead. Morphh ^(talk) 15:57, 24 September 2008 (UTC)

I would like a better source. I'll be upfront on this: I believe Pennyseven is yet another sockpuppet of Nicolaas Smith, who is indefinitely blocked and has a long record of attacks and disruptive editing. (AKA Kjkkjjk or whatever, X-1111, Pacluc, etc ad nauseum). The obsession is to push this point, and his (applied for patent) RealValueAccounting and text (i.e. conflict of interest).

If other editors think this is sufficiently sourced (I would argue a) wp:undue and b) that exceptional claims require exceptional sources - i.e. there should be more than one reference really), and it can be well documented, then it may make sense.--Gregalton (talk) 16:27, 24 September 2008 (UTC)

Thanks for the clarification - I was unaware of the history. I just did a quick search on the web thinking it was a more widely addressed concept. I'll remove the statement from the lead at least, since we have at least three people that feel it is undue weight. Morphh ^(talk) 17:00, 24 September 2008 (UTC)

I've looked before on the web, and found that the characteristic terms used can be traced (as far as I can tell) only to this one person. Now, to be up front, his article did eventually get published in a South African accounting magazine - as (what I would characterise as) an opinion piece. (There was a long flurry of attacks and back and forth when I noted that the SSRN piece was essentially self-published, i.e. did not meet the test of editorial review). I should also note there are IP addresses which are easily identified as the one user that have posted outright attacks as recently as a couple of weeks ago.

For clarity, I have not yet requested a checkuser and cannot affirm with certainty that Pennyseven is the same user. I'm frankly a bit tired of running checkusers on the same two editors that have so blatantly sockpuppeteered (the other is Karmaisking aka the Truthcomesfromagunboat etc that has been harassing and attacking lk). If I turn out to be wrong about Pennyseven (and a couple of other monikers I suspect), I will apologize and admit my error.--Gregalton (talk) 17:24, 24 September 2008 (UTC)

Is it just me or is the citation provided by Pennyseven actually about inflation and the tax code rather than "erosion of non-monetary values". In either case I think both erosion of monetary value and non-monetary value, without too many specifics (article too long already) should be included in a single bullet point.radek (talk) 18:37, 24 September 2008 (UTC)

Inflation erodes historic costs per se: all historic costs. If it does it to tax assets and liabilities it does it to the historic cost of all assets and liabilities.PennySeven (talk) 18:44, 24 September 2008 (UTC)

It is a basic concept and affects all historic costs in the economy. It is impossible that it could only affect tax items. That is completely impossible. PennySeven (talk) 18:48, 24 September 2008 (UTC)

I think simply stating: "Inflation erodes the historic cost of assets and liabilities" will not be regarded by anyone as undue weight. I think all other facts have more weight than the above nine word sentence. PennySeven (talk) 19:03, 24 September 2008 (UTC)

The edit I made was to have the text correspond to the source, which was entirely about the effect on taxation. While the statement "erodes historic values" is in the text, your usage of it is incomplete; the source attaches no positive or negative value to this apart from the distortion of taxation. In other words, the source (in my view) sees the "erosion" as the mechanism for distortionary effect of inflation on taxes, not the cause or the effect. You reiterate that it affects historic costs, the question is how important that is in the context of this article.--Gregalton (talk) 19:26, 24 September 2008 (UTC)

I have reverted based on the above. Other views welcome.--Gregalton (talk) 19:30, 24 September 2008 (UTC)

The larger factor that I see regarding inflation with respect to government revenue is the capital gains that may be realized when the value of the dollar decreases, which would reduce the real value of nominal government debt. Morphh ^(talk) 19:36, 24 September 2008 (UTC)

The full quote actually appears at the top of Page 8: "Inflation erodes the historical cost of the taxpayer´s assets and liabilities." I think just stating a direct quote: Inflation erodes the historical cost of assets and liabilities - is enough. You are giving the distortion in taxation undue weight. I just found the direct quote in a taxation article available for you to verify on the net. If we highlight the distortion in taxation then we should highlight the distortion in many other areas too. I do not think that is necessary. It is generally accepted that inflation distorts many areas in the economy because of historical costs. That is why I feel that simply quoting directly from the IMF document stating that Inflation erodes the historical cost of assets and liabilities - is enough. It was not my intention at all to add a contribution about the distortion caused by inflation and historical costs in specifically taxation. I just found the direct quote in that article for you to verify on the net. It is generally accepted that inflation distorts the economy because of historical costs. It is not always that easy to find a direct quote like the one in the IMF article. In my opinion the contribution about the distortion in taxation is giving undue weight to inflation´s effect in taxation as compared to all the other areas where the same thing happens. PennySeven (talk) 20:02, 24 September 2008 (UTC)

The article is also getting too long. I think my short 9 worded statement is enough. That is my opinion. PennySeven (talk) 20:05, 24 September 2008 (UTC)

Inflation distorts the tax system. Yes. It also distorts the accounting system, financial reports, remuneration systems, all historical values, whole economies in hyperinflation, etc, etc. If we have a paragrapgh about taxation, we should have a paragraph about all the above too. Thus: undue weight given to taxation simply because the verifiable quote was found in a tax article. PennySeven (talk) 20:15, 24 September 2008 (UTC)

The article you found is about taxation, in a book about taxation; it's a little strange to claim undue weight. You say (twice!) "It is generally accepted that inflation distorts many areas in the economy because of historical costs;" I don't agree the "because of" is generally accepted at all.--Gregalton (talk) 20:40, 24 September 2008 (UTC)

Sorry, I meant undue weight in the inflation article.PennySeven (talk) 20:45, 24 September 2008 (UTC)

To save others the trouble, the full quote on page eight is actually "Third, the tax base is distorted, because inflation erodes the historic cost of the taxpayer's assets and liabilities." The bolded part of the sentence was left out.

Followed by: "Costs of acquiring property are accounted for in historical terms. The determination of income from property requires accounting for the cost of the property and allowing the taxpayer to recover this cost. Accounting for the cost in historic terms erodes the value of the cost recovery and overstates the tax base." So what you've said is the complete quote is incomplete and ignores the context, which is entirely about taxation and the determination of income/profit tax in an inflationary environment.--Gregalton (talk) 20:49, 24 September 2008 (UTC)

Don´t worry, I won´t delete the tax bit. It can stay as far as I am concerned ;-) PennySeven (talk) 20:58, 24 September 2008 (UTC)

Apparent sourcing error

• Reference 43 cites this source as a reference for Critics argue that this will cause arbitrary fluctuations in the inflation rate, and that monetary policy would essentially be determined by gold mining[43]. The only passage referring to "gold" I could find in that source says, "Crises, however, are more frequent now than during the gold standard and Bretton Woods periods". There are no references to "mining" either. I haven't checked the history; perhaps a sentence was deleted, leaving the reference orphaned. Cheers, Jayen466 19:14, 24 September 2008 (UTC)

Fixed. -- lk (talk) 16:45, 25 September 2008 (UTC)

NPOV tag

Any objections to removing the NPOV tag? The original issue for which it was placed seems to be resolved. Since I seen no active or specific NPOV objections (required for the tag placement as a last resort), I suggest we remove the tag unless someone wants to outline a specific issue that violates policy so others can attempt to discuss and address the issue. Morphh ^(talk) 13:10, 25 September 2008 (UTC)

I believe the tag was placed by Misessus who was objecting to our contention that his edits about the Austrian school were WP:UNDUE. I'ld say we have consensus among econ wikiproject members that the page looks much better now. lk (talk) 16:54, 25 September 2008 (UTC)

I haven't placed any flags anywhere, but you've never been shy to make false assumptions and accusations before, so I wasn't surprised to read this. As far as I'm concerned, I think the current state of the article is rather okay. Could be a lot better of course, but you can't ask too much of WP. That much I've learnt the hard way.

Misessus (talk) 13:12, 27 September 2008 (UTC)

Irrelevant paragraph

I'm in favor of removing this whole paragraph:

While not advocating a return to a gold standard, former U.S. Federal Reserve chairman Alan Greenspan did argue in favor of keeping gold reserves, "This issue was debated, incidentally, in the United States in 1976, and the conclusion was that we should hold our gold, and the reason is that gold still represents the ultimate form of payment in the world. ... And gold is always accepted and is the ultimate means of payment and is perceived to be an element of stability in the currency and in the ultimate value of the currency and that historically has always been the reason why governments hold gold."[48] However, Alan Greenspan was in favor of suppressing the gold price and testified before Congress that "Central banks stand ready to lease gold in increasing quantities should the price rise."[49] Austrian economists strongly favor a return to a 100 percent gold standard.

What Greenspan did or did not say is irrelevant. Especially since he was not talking about inflation, and he did not explicitly endorse or reject the gold standard. lk (talk) 17:00, 25 September 2008 (UTC)

I was sort of leaning that way myself when I was editing that section. For a policy that no one currently uses, four paragraphs seems a bit much (undue weight). It's bigger than monetary policy, which needs to be expanded IMO. (On a side note... wouldn't gold standard and fixed exchange rates also be a monetary policy.) I say cut the paragraph, perhaps keeping the last sentence to maintain the pov that some advocate for a return to the gold standard (so it's not completely historic). Morphh ^(talk) 17:33, 25 September 2008 (UTC)

Alan Greenspan states an essential characteristic of gold that it is "the ultimate form of payment in the world." This speaks to the nature and role of gold as money; the highest quality money and currency in the world. Despite the formal abandonment of the gold standard in 1971 Dr. Greenspan uses the present tense in his statements nearly two decades later. Additionally, the Bank for International Settlements treats gold as a financial instrument and requires appropriate accounting translations under accounting standards in its Annual Reports. These two highly credible sources in international finance and how they view and treat gold make the statements extremely relevant in this article. For these reasons I am not in favor of removing the paragraph.

The last sentence about Austrian economists favoring a return to a 100 percent gold standard needs to be sourced. The book The Case for a 100% Gold Dollar by Murray Rothbard would probably suffice. From what I understand not all Austrians are in favor of such a return. Jonahtrainer (talk) 01:32, 26 September 2008 (UTC)

Erosion of value by inflation in the economy is a very minor point and should not be mentioned in article.

I have come to agree with lk" "This is a topic that concerns very few people and that isn't discussed in most text books." and Morphh "This seems like a very minor point with regard to the article as a whole and probably doesn't deserve mention in the lead.

I agree with Morph and lk that the erosion of value by inflation is a very minor point and should not be mentioned in the article at all. PennySeven (talk) 17:58, 25 September 2008 (UTC)

To be clear, we were referring to the erosion of "accounting values". Morphh ^(talk) 18:04, 25 September 2008 (UTC)

Yes, I agree 100%. Erosion of "accounting values". Accounting values - the values that appear in balance sheets - are not real values so their erosion has no importance at all.PennySeven (talk) 18:08, 25 September 2008 (UTC)

I must admit that I was playing the Devil´s advocate above.

Alan Greenspan´s understanding of the importance of the erosion of real value by inflation is what makes him say: "Low inflation is what creates long term sustainable economic growth."

The Deutsche Bundesbank states it as follows in their 1996 Annual Report: "The benefits of price stability, on the other hand, can scarcely be overestimated, especially as these are, in principle, unlimited in duration and accrue year after year."

Low inflation means low erosion of real value in the economy and the benefits as stated above. PennySeven (talk) 21:45, 25 September 2008 (UTC)

Quality vs Quantity theories

AFAIK, the argument of Quality vs Quantity theories of inflation were last in vogue in the 18th century. I believe David Hume and Adam Smith discussed it. In modern economics, the quality theory can be seen as a counterpart to real money demand, and the desire to hold money.

IMO, we should delete references to the Quality theory of money. The Quantity theory has won out. But I'm terrible at economic history. We should probably ask someone who knows more about modern economic history.

I'm thinking that we should try to make it clear in the part about causes that the mainstream theory of money is essentially a combination of Quantity theory for long run, and Keynesian AS/AD for short run, and with arguments between New Keynesians and Chicago school over how short the short run is. But I'm not sure how to go about organizing that section.

lk (talk) 18:37, 25 September 2008 (UTC)

How do I block Radeksz?

Can somebody tell me what to do to get Radeksz blocked for repeatedly vandalizing the inflation article. Vandalizing paragraphs with many refences and with items that previously appeared in the inflation article for a long time.PennySeven (talk) 11:31, 26 September 2008 (UTC)

We should assume good faith but Radeksz is failing to discuss his concerns here (edit summaries are not the place to debate the matter). Since he is removing sourced material, I shall revert. Colonel Warden (talk) 12:05, 26 September 2008 (UTC)

I have reviewed the edits, and Radeksz's two reverts are clearly not vandalism. This is a content dispute. However, if any editor becomes disruptive by edit warring against consensus, abusing multiple accounts, or harassing other editors, they will be blocked. — Satori Son 12:34, 26 September 2008 (UTC)

PennySeven, Radeksz is not a sock. A cursory look at his history shows this. And he's not reverting without reason. You're pushing a particular POV that demands undue weight on your claim that accounting values are eroded by inflation and must be corrected for. Frankly, I don't see any reliable sources for such a claim. If you look at the discussion above, you can see that several editors have already discussed the appropriate weight for your claims, and consensus is that no more than a line or two in the body is appropriate. You're pushing the same topic that a banned sock puppet user was pushing before. If you keep on pushing it without consensus, that would be prima facie evidence that you are that banned user. lk (talk) 14:52, 26 September 2008 (UTC)

• I just searched using the phrase "accounting values are eroded by inflation and must be corrected for" and there seem to be numerous sources. This aspect seems more significant than you suggest. I also doubt that this view is so bizarre that it may be used to identify particular editors. Per WP:AGF, we should focus upon the substantive content issue rather than engaging in a witch-hunt. Colonel Warden (talk) 15:19, 26 September 2008 (UTC)

You're using google wrong. I just tried doing a search for [ "accounting values" "eroded by inflation" corrected ]. I found exactly one hit. lk (talk) 17:46, 26 September 2008 (UTC)

No, searching for exact matches in such a case is not helpful, as you found. My search was chosen to deliver sources which used the same keywords. Obviously one then needs to sift these further but the results indicated that there are good relevant sources out there. Colonel Warden (talk) 18:08, 26 September 2008 (UTC)

In that case kindly do add them. Do note that the editors here have previously searched for legitimate reliable sources to back up PennySeven's claims, and have found a couple of articles but nothing from peer reviewed journals. If you do fiind anything else, do post it below. lk (talk) 18:23, 26 September 2008 (UTC)

It is the IASB´s view in IAS 29 and in the Framework par 102 and 104 to 110 that inflation erode accounting values. The IASB represents millions of accountants in the world. It is their POV - a generally accepted POV.PennySeven (talk) 15:32, 26 September 2008 (UTC)

PennySeven's incivility, false accusations and rudeness aside, as I've indicated above I think it's fine if there's a mention of this somewhere in the article. What I object to is inserting it all over the place with clumsy references basically making the article more of a mess than it already is and giving it undue weight. Additionally PennySeven has a tendency to make like thirty different edits over a short span of time. Some of these are legit edits and some are just plain POV pushing. I'm sorry but in those cases it really is too much work to go through each of the thirty different versions and only revert the stuff that doesn't belong - hence, I reverted to the last non=PennySeven version. Perhaps in the future the user in question could discuss wordings and insertions on the talk page first before making a mess of this article.radek (talk) 16:13, 26 September 2008 (UTC)

• Your action does not distinguish the "legit edits" from the ones which you contend are otherwise. It also seems contrary to the general guidance of WP:OWN and so I intend to revert. I suggest that you instead tag the portions to which you object using a template such as Template:POV-statement. This will allow us to understand and discuss your objections better. Colonel Warden (talk) 16:27, 26 September 2008 (UTC)

I stated my reasons for not distinguishing the legit edits from the other above - edit spamming by PennySeven. Additionally the changes that I, AND OTHERS, object to have been discussed above. There's too much weight given to this in the "Effects" section. It is not notable enough to be in the lead. And do you actually think that readers will have any idea what "Ref: IAS 29 Par 12" means? I think the first two bullet points should be combined and placed further down the list - as they were before PennySeven got all crazy with this page. Please note that S/HE is the one going against consensus here, so if we're going to have a stable page while we hash our differences out it should NOT be his/her version but rather the consensus one. Hence I am reverting back to the previous, consensus, version.

Additionally, whatever happened with the "Causes" section? It used to be broken up between mainstream views and "others", again per undue weight. We had an edit war over it with another troublesome user. Now it's back in the same category.radek (talk) 16:59, 26 September 2008 (UTC)

• Your language - "spamming", "crazy", "troublesome" - is uncivil. User:PennySeven just seems to be editing the article in an ordinary way and per WP:BOLD is not required to submit his edits for approval by you or anyone else. You indicated above that the article was already a "mess" and so your new contention that there was a stable consensus version is inconsistent. My impression is that article has been in a state of flux for some days and that other editors such as User:Lawrencekhoo have also made numerous edits. Perhaps, since we have an enforced pause, someone could recapitulate the reason(s) for this sad state of affairs. Colonel Warden (talk) 17:57, 26 September 2008 (UTC)

In the light of PennySeven accusing me of being someone else's sockpuppet (based only on the fact that I disagreed with her/him) and that s/he created a whole section on the talk page with the intent of having me blocked (based only on the fact that I disagreed with her/him) I think I'm actually being quite cordial here. As far as my accusation of edit spamming on the part of that user goes, please take a look at the history of the page. Between 19:45 and midnight of last night PennySeven made almost 55 different edits. FIFTY FIVE! Some of them may have been legitimate but these were lost in the sea of illegitimate ones. I am NOT going to look through all fifty five and sift through the mess - particularly since after he was done the article looked like a mess. Furthermore, in my 5+ years experience at Wiki, I've seen a similar tactic often used by troublesome users who wish to disguise controversial (i.e. against consensus) changes among non controversial ones and who are trying to purposefully make it difficult for other editors to revert their changes. Now, I know there is the AGF policy. But I don't see how that applies to someone who's been obstinate in their revert warring and who's called you a sockpuppet without any evidence what so ever.

As far as the status of the article being a mess even before PennySeven got a hold of it, please not that there's a difference between it being a mess and it being unstable. After the last revert war with editors who wished to push a particularly Austrian POV the article became stable for about a week. It was a mess but it was a stable mess. As a result editors were able to get to work cleaning it up and making it better (Morph, I'm sorry if I reverted any legitimate edits you might have made, with this many edits it's just hard to tell). And it was getting better. Until PennySeven started disrupting the whole process, inserting his own POV and revert warring. Now it's more of a mess and unstable to boot (and I'm thankful for the protection here, btw).radek (talk) 18:40, 26 September 2008 (UTC)

I changed the causes section as it was a violation of WP:NPOV#Article structure. Undue weight is maintained in the context itself for the point of view, which has been significantly adjusted. See the Article stucture and expansion and Views and theories (and lk's post on Quality vs Quantity theories) discussion regarding restructure. As far as my thoughts on the PennySeven's edit's, I only commented on the content in the lead as undue weight with regard to "accounting values" and the article as a whole. I don't have an issue with adding additional points of view to the effects section. As for weight, I think it may need to be trimmed or merged, but I'm not sure that is reason to delete it. In fact, I think that entire section is a mess and needs to be cleaned up and put into prose. I do agree that there needs to be clarification on "IAS ref". Morphh ^(talk) 17:28, 26 September 2008 (UTC)

I am sorry if my enthusiam is seen as "spamming". I think I have the answer to the problem. I should use a "sandbox" and do all my changing in this "sandbox". I make the mistake of doing it in the article - which leads to editors accusing my of spamming. It is not intended to be spamming at all. I do not even know what spamming an article means. Most probably adding the same comment many times. I am not doing that. I am writing my contribution. I am fixing it all the time. I now see that I should do that in a sand box. Next time I will do that - if I am allowed to have a next time.

What is the clarification required on the IAS reference. It is just an incomplete reference. I stated every time that I would fix the references. I also have to sleep, you know. I was going to fix the references today. I work too. PennySeven (talk) 19:04, 26 September 2008 (UTC)

Thank you. Using the sandbox and making rough draft proposals on the talk page is definitely welcome. When you put in your references use the format "" rather then inserting it in the text.radek (talk) 19:07, 26 September 2008 (UTC)

Thank you. I will do that. I will have to wait for the protect period to pass and see what is going on. I found many good references on the net. I think IMF papers, Bernanke speeches and top newspaper reference should be regarded as reliable sources. I left out the ones I found in a Zambian online newspaper. I never knew that, but there are many references on the net for the things I state in my edits. I am pleasantly surprised.

Obviously I feel that the IASB reference should be enough. The IASB is certainly a totally reliable third party source. It represents the view of millions of accountants from all over the world. And not only accountants. There are many non-accounting groups represented at the IASB. I think economists too. I should go and have a look at their current representation. It is huge. I am referring to IAS 29 and paragraphs 102 and 104 to 110 in the IASB framework. These two references are actually references to International Financial Reporting Standards since the term IFRS is being used in the literature to include The Framework, IASs and IFRSs - all in one. PennySeven (talk) 19:20, 26 September 2008 (UTC)

Here is a list of the IASB´ Trustee Appointments Advisory Group. Most of them seem to be non-accountants.

Trustee Appointments Advisory Group

The Trustee Appointments Advisory Group is a high level and broadly representative advisory group. It was set up to help the Trustees in discharging their responsibility for nominating and appointing highly qualified and interested individuals as Trustees.

Paul Volcker, Former Chairman of the Trustees and former Chairman of the Board of Governors, US Federal Reserve System Jane Diplock, Chairman of the Executive Committee, International Organization of Securities Commissions Mario Draghi, Chairman, Financial Stability Forum Donald Kaberuka, President, African Development Bank Haruhiko Kuroda, President, Asian Development Bank Luis Alberto Moreno, President, Inter-American Development Bank Dominique Strauss-Kahn, Managing Director and Chairman of the Executive Board, International Monetary Fund Jean-Claude Trichet, President, European Central Bank Robert B Zoellick, President, World Bank

[1]

PennySeven (talk) 19:37, 26 September 2008 (UTC)

This "edit war" thing is a bit stange to me too. I think I just reverted Radekz revert ONCE after all my changes. I do not regard that as an "edit war". lol PennySeven (talk) 19:43, 26 September 2008 (UTC)

Inflation erodes historical cost non-monetary accounting values

My contribution to Effects of Inflation:

• Erosion of monetary items - Inflation erodes the real value of money and other monetary items over time.

• Erosion of historical cost non-monetary items - The real values of fixed nominal payments of non-monetary items (the IASB defines non-monetary items) like rents, pensions, wages, interest, taxes, etc. as well as non-monetary (Ref: IAS 29 and IASB Framework) assets and liabilities stated at historical cost, e.g. retained earnings, accumulated losses, issued share capital, share premium accounts, share discount accounts, capital reserves, provisions (e.g. provision for depreciation or amortisation fund), trade debtors, trade creditors, taxes payable, taxes receivable, deferred tax assets, deferred tax liabilities, dividends payable, dividends receivable, etc. - are eroded if they are not inflation-adjusted.
• Inflation erodes the real value of the government's debt.

PennySeven (talk) 19:56, 26 September 2008 (UTC)

I must admit that I am completely indifferent to whether any of this appears in the lead or not. I am interested in the economics, not whether it should be in the lead or not. As far as I am concerned none of this needs to be mentioned in the lead at all. What is important to me is the economics - that the facts are presented - with references where possible. Luckily I have - to my pleasant surprise - found many references on the net for what are in my contribution. I will look for more. I may be even more surprised.

Now I can analyse one statement and one reference at a time - and not be accused of "spamming" the article. PennySeven (talk) 20:04, 26 September 2008 (UTC)

I thus agree with Radekz that my contributions to the lead regarding the above two paragraphs in the Effects section can happily be deleted. So, that sorts that one out. PennySeven (talk) 20:08, 26 September 2008 (UTC)

I thus agree with Redekz and other editors to give it NO WEIGHT in the lead. PennySeven (talk) 20:49, 26 September 2008 (UTC)

Let´s take the first paragraph:

• Erosion of monetary items - Inflation erodes the real value of money [2] [3] and other monetary items over time. Ref: IAS 29 Par 12: Monetary items are money held and items to be received or paid in money.

Since the statement: "Inflation can also be described as a decline in the real value of money—a loss of purchasing power." appears in the opening paragarph in the lead, I feel that my first paragraph about Erosion of monetay items can be deleted.

The reason I wanted to add it is to make the Effects section complete: Inflation erodes the real value of monetary items AND historical cost non-monetary items. That is the full picture.

It is also true that inflation´s MAIN effect is that it erodes the real value of monetary items. It seems illogical to leave it out of the EFFECTS section. Friedman: inflation is always and everywhere a monetary phenomenon.

But, it can be deleted since it is already in the lead. That will make the editors happy who feel that this is being given undue weight because more of what I stated is being deleted.PennySeven (talk) 21:09, 26 September 2008 (UTC)

Now we are left with the paragraph about inflation eroding historical cost non-monetary items.

It will be difficult to delete examples that have direct reliable references. That would be directly against Wikipedia policy. PennySeven (talk) 21:15, 26 September 2008 (UTC)

I suppose we should analyze the statement sentence by sentence and example by example.PennySeven (talk) 21:18, 26 September 2008 (UTC)

I don't know that the first and third point are anything disputed (although I wouldn't put the erosion of government debt as a positive, depends on if your the borrower or the lender - this good / bad structure should probably go altogether.) The second statement also has several early points that are uncontested. The dispute seems to be over the non-monetary assets and liabilities but this does contains many refs, which seem to be acceptable as a reliable source. I think the second statement is verbose (I think we have an e.g. within an e.g.), but over all, I'm not opposed to the inclusion of this content. Morphh ^(talk) 21:24, 26 September 2008 (UTC)

The third point:

I only noticed now that it was also deleted. I think it is the way the deletion was done. In fact, it was that.

The third point was included under the second section in the Effect section:

Some possibly positive effects of (moderate) inflation include:

I found it in Bernanke´s speach and included it in that "positive effects" section. Perhaps Radeks did not really wanted to delete it, but it was deleted in the way he did the deletion.

It can be deleted as far as I am concerned. I am not really interested in that. I just happened to find Bernanke saying that. PennySeven (talk) 21:38, 26 September 2008 (UTC)

I am not Shakespear - so if you can rewrite it in a less verbose way I am happy to check that it still means the same.

The "non-monetary" assets and liabilities: The IASB defines monetary and non-monetary items. I do not think that should really be a problem. The split between monetary and non-monetary items in my contribution is necessary because the monetary erosion is dealt with in the first paragraph. Monetary items are very different from non-monetary items.

Another editor stated: "Fixed nominal payments (e.g. rents and wages) are eroded if they are not inflation-adjusted." Not all "fixed nominal payments" can be inflation-adjusted. "Fixed nominal payments" of monetary items cannot be inflation adjusted because money and other monetary items cannot be inflation-adjusted. Only nominal (historical cost) non-monetary items can be inflation-adjusted. That is why I changed that editor´s statement to: "The real values of fixed nominal payments[9] of non-monetary items (the IASB defines non-monetary items) like rents, pensions,[10] wages,[11] interest, taxes, etc. I have to fix the IASB reference. The other editor only mentioned rents and wages. I added pensions, interes and taxes to cover the four main areas of income plus pensions: rent being the income of land and property, wages of employment, interest of money and taxes of government - plus pensions being the income of retired people. Those are the main "income" areas. PennySeven (talk) 22:03, 26 September 2008 (UTC)

Then I added: "as well as non-monetary (Ref: IAS 29 and IASB Framework) assets[12][13] and liabilities stated at historical cost".

Again: I will fix the IASB references. Again: only non-monetary assets and liabilities can be adjusted for inflation. And they have to be historical cost items. Non-historical cost items are automatically adjusted for inflation in the way they are valued in terms of IFRSs.

Then I just started listing historical cost non-monetary items as defined by the IASB in IAS 29. That they all have to be adjusted for inflation is stated in IAS 29. I also found other direct references for Provisions (amortization fund) and taxes payable. There seems to be numerous direct references to the fact that taxes payable are eroded by inflation - mainly because of Tanzi´s work in Brazil.PennySeven (talk) 22:23, 26 September 2008 (UTC)

BTW, thank you for your vote of confidence in the economics presented. I almost fell out of my chair!!PennySeven (talk) 22:35, 26 September 2008 (UTC)

I must again state that I am very pleasantly surprised at the many direct references I found relating directly to what I contributed.

And I have not really put in a great effort to find references. I am really surprised.PennySeven (talk) 22:38, 26 September 2008 (UTC)

The reason I did not look for direct references before is that I feel everything is adequately covered in IAS 29 and par 102 and 104 to 110 in the IASB´s Framework. The IASB is an outstandingly reliable third party reference. PennySeven (talk) 22:42, 26 September 2008 (UTC)

It is also nice to know that my frequent edits here are not going to be labelled "spamming". How anyone can see the above as spamming beats me. PennySeven (talk) 22:58, 26 September 2008 (UTC)

Protected

Article protected 24 hours for edit warring. Please discuss the edits on the talk page. (I don't have a dog in this hunt, except that someone else was applying IAS + a clearly non-realiable source to hyperinflation, and I may have deleted some of the IAS comments.) — Arthur Rubin (talk) 17:07, 26 September 2008 (UTC)

Yes, you have. You have also deleted another editor´s comment that he searched and found numerous references for something like : inflation erodes the real value of accounting items and should be corrected - or something like that. 213.63.46.8 (talk) 17:22, 26 September 2008 (UTC)

Endorse protection: I was considering doing it myself. The alternative seems to be short blocks for edit warring.--Tznkai (talk) 17:26, 26 September 2008 (UTC)

To the anon. Please explain. I reverted the NESARA interpretation in Inflation accounting, but I can't see that I've edited Inflation in a few months. — Arthur Rubin (talk) 17:28, 26 September 2008 (UTC)

He seems to be referring to my link to sources which still appears above. Some confusion between the talk page and the article, perhaps. Colonel Warden (talk) 18:00, 26 September 2008 (UTC)

Weight to be given to the fact that inflation erodes historical cost non-monetary values

Before the freeze expires we should probably try to agree on the weight to be given to inflation accounting. I'm of the opinion that it deserves a couple of lines, and an internal link to the inflation accounting page. It should not be in the lead, and shouldn't be in more than one place. (This includes mentions of devaluing of non-monetary items etc, and any other similar claims.) The effect of inflation on money and monetary items with fixed nominal values is a more mainstream view, and statements about this should perhaps be a little more prominent. Additionally, given the importance of this subject and amount of sources about it, we should strive to use the highest quality sources. Peer-reviewed journal articles, university published book, reputable textbooks, and important mainstream newspapers & magazines. lk (talk) 09:12, 27 September 2008 (UTC)

• Our usual style seems to be a section which provides an outline and which starts with a main link to the article on the sub-topic. For example, see Large Hadron Collider#Safety of particle collisions. Colonel Warden (talk) 09:24, 27 September 2008 (UTC)

Please note: This is not inflation accounting as attempted in the 1970´s. This is about what the IASB provided for in Paragraphs 102 and 104 to 110 of the Framework; namely, that accounting can be done in a way to attain capital maintenance in terms of constant purchasing power units instead of using the Historical Cost model. The IASB is not promoting 1970 style inflation accounting in par 102 and 104 to 110 of the Framework as Lawrencekhoo are really referring to when he states: "we should probably try to agree on the weight to be given to inflation accounting." This is not inflation accounting. Please do not use that term in reference to what we are discussing here because it is not what this is about - although almost everyone without exception immediately thinks that is what this is about. It is not.PennySeven (talk) 10:30, 27 September 2008 (UTC)

I disagree completely with an internal link to the inflation accounting article. Maybe an internal link to the Historical Cost article, yes. But definitely not to the inflation accounting article because the IASB is not promoting 1970 style inflation accounting in the Framework.PennySeven (talk) 10:34, 27 September 2008 (UTC)

• We should take a global and historical view of topics in our articles and should not seek to promote a particular POV. Some countries still have to deal with high inflation and must account for it in some way. See this paper on Mexico, for example. If there is confusion about the different methods and standards for this then we should try to clarify the matter. We should not make assumptions about what our readership is looking for and should provide them with narrative which explains which link to follow for more detailed treatments. Colonel Warden (talk) 10:51, 27 September 2008 (UTC)

The topic of this article is inflation not inflation accounting. The fact that inflation erodes historical cost non-monetary items and is corrected by inflation-adjusting only such items is what we are discussing here; specifically the weight it should be given in the article. We can point out that the IASB provided for this in the Framework, Par 104 (a): "Financial capital maintenance can be measured in either nominal monetary units or units of constant purchasing power." In my opinion it is very clear that the IASB is not promoting 1970 style inflation-accounting with their provisions in the Framework. The IASB promotes the POV of millions of accountants all over the world. This is important in the global sense since all economic activity is accounted by accountants. This article is not about high inflation and the fact that some countries have to deal with it. It is simply about inflation. This is my respectful opinion. As far as I am concerned you can link to the inflation accounting article, the histrical cost accounting article and the hyperinflation article. Inflation influences many areas. I am sure more internal links would come to mind. They are all related.

PennySeven (talk) 12:24, 27 September 2008 (UTC)

Mexico: I could not open your link. I see Mexico ended inflation accounting. [4]PennySeven (talk) 12:28, 27 September 2008 (UTC)

The reason I refer to the IASB´s Framework and IFRSs is that the IASB represents the view point of millions of accountants. I did not dream up this point of view all by myself. The Framework and IAS 29 are quite old statements. The numerous direct references on the internet are also another indicator that this is not my single point of view.PennySeven (talk) 12:37, 27 September 2008 (UTC)

Please also note that it is not really necessary to state that monetary items have fixed nominal values. All monetary items have always had fixed nominal values since money and other monetary items cannot be inflation-adjusted. Only historical cost non-monetary items "with fixed nominal values" can be inflation adjusted. See IASB Framework Par 102 and 104 to 110.PennySeven (talk) 10:41, 27 September 2008 (UTC)

As far as weight is concerned I am sure everyone will agree with the following:

Nothing in the lead.

The following statement at the very end of the Effects section - after the Austrian view:

Inflation erodes the value of historical cost non-monetary values.

I do not think anyone will object to that.

I will add all the references that appear in the deleted version at the end as references in reference format. —Preceding unsigned comment added by PennySeven (talk • contribs) 13:05, 27 September 2008 (UTC) PennySeven (talk) 13:09, 27 September 2008 (UTC)

That will give it the least weight possible: nine words.PennySeven (talk) 13:11, 27 September 2008 (UTC)

If those nine words are still considered to give too much weight to the subject then the statement can be reduced to five words:

Inflation erodes nominal non-monetary values.

I can also state the same in four words but that will be too much of pure fact for editors to accept. PennySeven (talk) 17:04, 27 September 2008 (UTC)

• More words are needed, not fewer. Your sentence currently appears at the foot of a list of beneficial effects of inflation. I doubt that the effect is beneficial but it hard to tell because the sentence is so terse. Colonel Warden (talk) 22:36, 27 September 2008 (UTC)

Colonel Warden, I am sorry I never noticed your comment before. You are right. I had the sentence in the wrong spot. I have already moved it. I am sorry that I had to remove the sentence after I moved it to the right place. I tried to reduce the sentence to as few words as possible because the "several Econ wikiproject members" group of inflation editors considered that this global effect of inflation in the overall real or non-monetary economy was being given too much weight - actually because I am the one who tried to add it. Previously I mentioned something about the fact that salaries are inflation-adjusted and some-one grabbed it and added the large Cost of Living Allowance sub-section. That was not considered too much weight for one single aspect of inflation´s very many effects. The unfortunate fact about this global very destructive non-monetary effect of inflation is that its inclusion in the article is not being based on generally accepted and correctly referenced economics, but on the personal attitudes of this "several Econ wikiproject members" group of editors involved here at the inflation article against me. Gregalton (or his "alter ego" Radeksz), the ring leader of this group, will eventually remove the sentence because of this witch-hunt against me. As to the terseness of the sentence: This "several Econ wikiproject members" group of inflation editors do not understand the importance of this non-monetary effect of inflation. They do not understand that the whole gambit of proofs of global value erosion in historical cost non-monetary items can be laid bare from an international accounting standard type statememnt like: Inflation erodes the real value of historical cost non-monetary items. Unfortunately I will not be allowed to add a statement like that to Wikipedia. As far as more words are concerned you will notice that Lawrencekhoo - a member of this group - wished to restrict the statement to as little as possible.PennySeven (talk) 22:53, 28 September 2008 (UTC)

Colonel Warden,

This is the long version of the statement:

• Inflation erodes the real value of historical cost non-monetary items - The real values of fixed nominal payments [5] of non-monetary items like rents, pensions [6], wages [7][8] , interest, taxes, etc. as well as non-monetary assets [9] [10] and liabilities stated at historical cost, e.g. retained earnings, accumulated losses, issued share capital, share premium accounts, share discount accounts, capital reserves, provisions (e.g. provision for depreciation or amortisation fund[11]), trade debtors, trade creditors, taxes payable [12] , taxes receivable, deferred tax assets, deferred tax liabilities, dividends payable, dividends receivable, etc. - are eroded if they are not inflation-adjusted.Adjusting Taxes for Inflation

You are welcome to add as much of it as you want in the article. I am not going to do it.PennySeven (talk) 00:11, 29 September 2008 (UTC)

You will note that the long version comprises 5 and a half lines of prose to state the global effect of inflation in historical cost non-monetary items in the real economy while the Cost of Living Allowance sub-section comprises 10 lines of prose.PennySeven (talk) 00:48, 29 September 2008 (UTC)

Lawrencekhoo, are you going to delete all my references?

lk (talk, Since you are very much against any facts about this contribution appearing in the article, please tell me if you are going to delete the reference to a Cambridge University Press publication because I quote the direct reference in the reference. The facts about this contribution will thus appear in the references. Are you going to delete the reference because of that. I would appreciate it if you could be so kind as to tell me now if you are going to delete all the references because I am going to spend a lot of time doing this with all the references and you may delete all of them because you do not want any facts about this contribution shown.PennySeven (talk) 20:13, 27 September 2008 (UTC)

lk talk please check the first reference for "Inflation erodes nominal non-monetary values" in Effects and let me know. Thank you.PennySeven (talk) 20:18, 27 September 2008 (UTC)

Inflation erodes the real value of historical cost non-monetary items How about Inflation erodes the real value of historical cost accounting items. Less confusing for the layman.

Yes, that is fine.PennySeven (talk) 18:22, 30 September 2008 (UTC)

This part should be a separate item:

It would be nice if the sources were cleaned up a bit. Do you know how to wikify sources? lk (talk) 19:31, 29 September 2008 (UTC)

No, I don´t.PennySeven (talk) 18:22, 30 September 2008 (UTC)

This appears in the text: "Insert the text of the quote here, without quotation marks", but when you edit the text it is not there to edit or add to. Can you please explain again where to add the text in the reference?PennySeven (talk) 19:00, 30 September 2008 (UTC)

Wikipedia:Citation templates will help your formatting by using a template. To learn more about reference styles (we use footnotes), see WP:CITE and WP:FOOT. Morphh ^(talk) 19:22, 30 September 2008 (UTC)

Thank you.PennySeven (talk) 19:24, 30 September 2008 (UTC)

Using quote= in the template allows you to quote the material. Morphh ^(talk) 21:15, 30 September 2008 (UTC)

Thank you. That was what I was looking for.PennySeven (talk) 21:26, 30 September 2008 (UTC)

Inflation erodes nominal non-monetary items - removed from article

I removed the statement for the following reasons:

1. No consensus reached on this talk page about the matter. 2. A contribution described by a respected Econ wikiproject member - Radeksz - with complete impunity as "nonsense" will obviously never make it onto the article page. 3. The members of this "several Econ wikiproject members" group of inflation editors are conducting a witch-hunt. 4. Gregalton or his "alter ego" Radeksz will eventually remove the statement - so why waste all this time on it.

PennySeven (talk) 22:47, 27 September 2008 (UTC)

It is mainly the certainty that Gregalton will eventually remove the statement that decided the matter for me.

PennySeven (talk) 22:57, 27 September 2008 (UTC)

At least it was quite fun to eventually discover that Radeksz is Gregalton´s "alter ego". Reading Wikipedia news that this is not so uncommon on Wikipedia also put the last nail in it for me.

PennySeven (talk) 23:10, 27 September 2008 (UTC)

As I've indicated above I was merely objecting to 1) you making the article a mess and inappropriately citing refs, 2) giving undue weight - which means I was fine with a short, well written and well referenced mention of historical costs in the bullet section. Please note that ALL items in that list are short and finally 3) your uncivil attitude and baseless accusations which you throw around. In particular accusations of sock puppetry are quite insulting.radek (talk) 23:43, 27 September 2008 (UTC)

Yes, yes, Gregalton.

Anything more to say? I´m sure you never thought I would catch you with your "alter ego". I will not tell you what give you away.PennySeven (talk) 10:20, 28 September 2008 (UTC)

My dear Gregalton,

this time you are keeping something that is well referenced out of Wikipedia. I´m sure all your fans will give you another Barn Star for that. BTW, how is the Barn Star count going? Received any more lately?PennySeven (talk) 10:53, 28 September 2008 (UTC)

Gregalton,

"merely objecting" and calling my contribution "nonsense" are two very different things. Now, you are "merely objecting". Previously you called it "nonsense" and not a single editor here sanctioned you for that. Other editors are punished for personal attacks when they do that. But, not you. The age old story: courses for horses. But, you are a "mainstream" Wikipedia editor - even with an "alter ego". So, you are protected.PennySeven (talk) 12:01, 28 September 2008 (UTC)

Gregalton,

At least Dr Lawrencechkoo, Phd., in academia, defended you saying you are just a little "brusque" with me. Maybe he is about to give you a Barnstar for your "brusque" diplomacy. PennySeven (talk) 12:11, 28 September 2008 (UTC)

Gregalton,

Btw, congratulations! Inflation is another article you are keeping in the dark ages. Add it to Historical Cost, Hyperinflation and Inflation Accounting. Your influence is very pervasive in economic articles on Wikipedia: oh yes: with your "alter ego" Have you got more than one?.PennySeven (talk) 12:40, 28 September 2008 (UTC)

Inflation erodes the real value of the government's debt.

This is a direct quote of what Bernanke said in his speech:

"In brief, the reason is that people know that inflation erodes the real value of the government's debt and, therefore, that it is in the interest of the government to create some inflation."

He is correct in what he stated since he was referring to the capital amount that the government actually has to pay back.

The interest the government pays on the debt is another economic item. PennySeven (talk) 17:12, 29 September 2008 (UTC)

You're using accounting arguments, when the relevant arguments are economic. Gov debt is rolled over constantly. If inflation rate is stable, the cost of financing gov debt is about the same no matter what the inflation rate is, as long as it doesn't change. If the government pre-announces an increase in the inflation rate, there will also be no change in the cost of financing government debt. Only an unexpected increase in inflation will decrease the real value of government debt. lk (talk) 19:18, 29 September 2008 (UTC)

I agree with you that the cost of financing gov debt is a known value as long as the inflation rate and interest rates do not change (there are most probably even more factors involved). Please note that you write about the cost of financing in your second sentence and then you change to the real value of government debt in your last sentence. The cost of financing the fixed capital amount borrowed and the actual fixed capital amount are obviously two different things. There are two economic items involved: the capital amount that is a fixed historical cost value that decreases in real value as inflation increases - at any rate of inflation. That is why Bernanke said: inflation erodes the real value of the government´s debt. Then we have the cost to the government of borrowing that money. That is what you are dealing with. I agree with what you say regarding the cost of financing government debt. What Bernanke said applies to the other item, namely, the fixed capital amount of the debt that is eroded at any level of inflation. —Preceding unsigned comment added by PennySeven (talk • contribs) 19:42, 29 September 2008 (UTC) PennySeven (talk) 19:46, 29 September 2008 (UTC)

This is not that important to me. I just think we should try and put correct statements in the article to improve the article´s credibility. When users read parts of articles that are not 100% correct, the article as a whole loses credibility to them - I think.PennySeven (talk) 19:52, 29 September 2008 (UTC)

That is in the governments books. Then we have the other side. The lender holding or owning that bond/bund or T-bill and trading it on the market. The T-bill´s value changes daily because of many factors. It is a specialist area of trading. PennySeven (talk) 20:09, 29 September 2008 (UTC)

I just happened to find the following reference: [13] Page 14 : The real value of the debt shrinks by a proportional amount (pie) as inflation erodes away the real value of the debt principal owed by the government.

I think it should be fine when I change the statement to: Inflation erodes the real value of the government's debt. PennySeven (talk) 22:21, 30 September 2008 (UTC)