Is it technically correct to use inflation only to describe the results of an increased money supply? I wish I had a comfortable grasp of economics. Do you recommend any basic text? Perhaps one based on an elaborate computer model with human responses to changing conditions built in? -- J.M.
Inflation is defined as rising prices, and the main reason behind continuing price increases is the expanding supply of money. Obviously, there is more to inflation than this simple cause-and-effect relationship, and economists of many shades explain this characteristic of modern society differently. No one basic text is likely to provide you with the fully founded explanation you seek. But several are: "Free to Choose," by Milton and Rose Friedman; "The Way the World Works -- How Economies Fail -- and Succeed," by Jude Wanniski (Basic Books); "Economics in Plain English," by Leonard Silk (Simon & Schuster); and "Economic Sanity or collapse," by Gerald R. Zoffer (McGraw-Hill). I know of no text on economics that is based on a computer model of human responses as you envision. Another possibility is to enroll in an evening course in basic economics at a local university or adult education program.