Rising prices make Americans gloomy about the economy, even if they’re not climbing as fast as they used to.
by Claudia Sahm
Bloomberg.com
The people who experience the US economy continue to disagree with the people who measure it, and the most likely reason is inflation: Most Americans still see it as a major problem, while most economists don’t. But this debate recently veered from economics to semantics. Has the common definition of “inflation” changed, and do economists just need to accept it?
Felix Salmon of Axios essentially answers yes to both questions. “The meaning of the word ‘inflation’ has changed” he writes. “It used to mean rising prices; now it means high prices.” This helps explain, he says, the disconnect between Americans’ perceptions of the economy and economists’ assessment of it.