History of Inflation in Timeline

Inflation, in economics, signifies a rise in the average price level of goods and services, diminishing the purchasing power of money. It's commonly quantified using the Consumer Price Index (CPI). The inflation rate, expressed as an annualized percentage change in a general price index like CPI, serves as a standard measure. Deflation, conversely, represents a decrease in the general price level, the opposite of inflation. The CPI tracks price changes faced by households.

1922: Monetary Disorder Era

In 1922, began the era of monetary disorder in the United States.

1936: Keynes' General Theory

In 1936, John Maynard Keynes published his main work, "The General Theory of Employment, Interest and Money", emphasizing the stickiness of wages and prices in the short run.

The General Theory of Employment, Interest and Money: With the Economic Consequences of the Peace (Classics of World Literature)

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1938: Monetary Disorder Era

The era of monetary disorder in the United States, which began in 1922, ended in 1938.

1948: High-inflation in Nationalist China

Towards the end of the Nationalist Chinese government, 1948 saw a high-inflation episode in the country.

1949: High-inflation in Nationalist China

Towards the end of the Nationalist Chinese government, 1949 saw a high-inflation episode in the country.

1958: Phillips Curve Publication

In 1958, Alban William Phillips published indirect evidence of a negative relation between inflation and unemployment, which confirmed Keynesian economics.

1972: Wage and Price Controls by Nixon

In 1972, Richard Nixon imposed wage and price controls.

1990: Inflation targeting as monetary policy

From its first inception in New Zealand in 1990, direct inflation targeting as a monetary policy strategy has spread to become prevalent among developed countries.

1990: New Zealand Adopts Inflation Target

In 1990, New Zealand became the first country to adopt an official inflation target as the basis of its monetary policy.

2000: Modern Phillips Curve

Around the year 2000, a modern Phillips curve emerged, incorporating supply shocks and inflation expectations.

January 2007: U.S. Consumer Price Index

In January 2007, the U.S. Consumer Price Index (CPI) was recorded at 202.416.

2007: Inflation Rate for CPI

In 2007, the inflation rate for the Consumer Price Index (CPI) in the U.S. was calculated to be 4.28%, indicating a general rise in prices for typical U.S. consumers.

2007: Argentina's economic data manipulation

Starting in 2007, the government of Argentina was criticised for manipulating economic data.

January 2008: U.S. Consumer Price Index

In January 2008, the U.S. Consumer Price Index (CPI) reached 211.080.

2010: Increase in money supply

From 2010 through 2015, the broadest measure of money supply, M3, increased about 45%, far faster than GDP growth, yet the inflation rate declined during that period.

2015: Increase in money supply

From 2010 through 2015, the broadest measure of money supply, M3, increased about 45%, far faster than GDP growth, yet the inflation rate declined during that period.

2015: Argentina's economic data manipulation

Until 2015, the government of Argentina was criticised for manipulating economic data, such as inflation and GDP figures.

October 2018: Venezuela's Hyperinflation

In October 2018, Venezuela experienced the world's highest hyperinflation, with an annual inflation rate of 833,997%.

2019: Publication of Monetary History Book

In 2019, Thomas M. Humphrey and Richard Timberlake published "Gold, the Real Bills Doctrine, and the Fed: Sources of Monetary Disorder 1922–1938".

Gold, the Real Bills Doctrine, and the Fed: Sources of Monetary Disorder, 1922-1938

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December 2021: Federal Reserve Chairman's Statement

In December 2021, Federal Reserve chairman Jerome Powell stated that the link between money supply and inflation "ended about 40 years ago."

2021: Increase in Inflation

In 2021, most countries experienced a considerable increase in inflation.

2022: Peak in Inflation

In 2022, most countries experienced peak inflation.

May 2023: Anchored Inflation Expectations

As per May 2023, inflation expectations generally seem to remain anchored.

2023: Denmark maintains a fixed exchange rate

As of 2023, Denmark is the only OECD country which maintains a fixed exchange rate (against the euro).

2023: G7 Member Countries Follow Inflation Target

As of 2023, the central banks of all G7 member countries follow an inflation target.

2023: Inflation Surge

During the COVID pandemic and its immediate aftermath, the M2 money supply increased at the fastest rate in decades, leading some to link the growth to the 2021-2023 inflation surge.