Teaching the General Public Inflation Basics Along With Short-Run and Long-Run Inflationary Fiscal and Monetary Policies

Abstract

Over the years a generally accepted pedagogy has developed to teach what inflation is and how it affects the economy in macroeconomic principles undergraduate courses. The recent re-emergence of elevated inflation in the United States and other countries draws in to question this pedagogy. A pedagogical refocus on inflationary connections to productive value, store of value, and a re-evaluation of the focus used to teach fiscal and monetary policy impacts on inflation is needed. This article proposes a non-technical standalone lesson that highlights how productive activities, the store of value of money, and the relation of those two interact with inflation. It also highlights fiscal and monetary effects on both transitory and permanent inflation in the economy. This lesson is accessible to the general public.