
Inflation is defined as the increase in the general price level, not the price of any particular item. The opposite of inflation is deflation: a general decline in price level. There are various statistical measures that indicate whether an economy is suffering (that’s the right word) inflation or deflation.
Price indices measure how the price level changes with time. I learned about them in grad school: Laspeyres, Paasche, Marshall-Edgeworth, and Fisher price indices.
We all know intuitively that inflation is not good for us because we have to pay more out of pocket for the same stuff we bought before. We also know that when the price of an item goes down, it is good for us. For example, today we can buy a lot more smartphone for $200 than we could 10 years ago. So then wouldn’t it be great if all prices were to fall (like they do in electronics as Moore’s “law” predicted)? Continue reading “Is Deflation Bad?”
Albert Einstein was born on this day, March 14th, in 1879. He will probably be remembered for as long as our present civilization persists. Like all the rest of us, he was a flawed human being. He too was made from the same crooked timber of humanity out of which no straight thing was ever made, as Immanuel Kant so memorably put it in 1784.




I recently came across a quote on the web that “many of the best investors in the world are really good at doing nothing for long periods of time.” 
