What is "True Inflation"?

There is only one true definition of inflation -- which is when the supply of money is growing faster than underlying economic growth. Rising prices are a common symptom of inflation.

True inflation is calculated by first calculating the rate of inflation,

then add in the lost productivity (growth) which occurred because of the original inflation.

Like this:

I had five bucks for gas to get to a job interview, but I lost it.

So I lost the five bucks AND I lost the paycheck that I would have earned by getting the job.

Yeah, it's big. But it's also nearly impossible to accurately define because we can never truly know "what if".

"What if" if got to the interview, but didn't get the job? We can't prove it one way or the other, so most people dismiss the whole concept.

Short run periods of price level change? That's what people say to sound smart on T.V.

In plain English-prices ain't what they used to be.

That can only mean that prices were either too high or too low and the business owner had to make a change or lose business. That's all.

So the difference between the two is that they are two totally different concepts that should not be compared.