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Paidman's avatar

Interesting graph with quite good correlation.

The question is how would it extend to values of inflation outside the boundaries of the graph – to rapid deflation or even prolonged deflation on the one hand or to chronic inflation or hyperinflation on the other?

The US has never had chronic inflation or hyperinflation, but both those phenomena may be a political consequence of extreme wealth concentration – I recall reading that there have been countries where the top one percent received as much as 56 percent of all income. Class envy under such a situation is very likely to cause chronic inflation, as it is more acceptable to the super-rich than the complete expropriation advocated by groups like the Socialist Equality Party.

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