Price adjustment

http://www.westegg.com/inflation/

What cost $5000 in 1830 would cost $99377.03 in 2009.

The inflation rate has averagd 3.3% per annum since about then. That means that the lens would cost $1,818,558.58 now.

Drachen and PeterL have come up with disparagingly different answers. One of them has to be wrong.

Of course, I'm sure that a comparable lens today would be much, much cheaper, due to advances in technology and so forth.

Except for strategic materials during wartime, inflation didn't really exist before 1913 when organized labor began pushing up the cost of production.

RJK said:

Drachen and PeterL have come up with disparagingly different answers. One of them has to be wrong.

Click to expand...

It is more likely that both of us are wrong. Price indices are inherently inaccurate, and I know that the 3.33 percent average is somewhere in the ballpark, but I know that it is not truth. The average rate that the other persopn used is about half the rate that I used, and I know empiracally that that is wrong.

Kathie Freeman said:

Except for strategic materials during wartime, inflation didn't really exist before 1913 when organized labor began pushing up the cost of production.

Click to expand...

inflation didn't really exist before 1913
That's news. While inflation was not as constant before the Civil War, inflation has existed since antiquity. There were periods in history when prices were flat, but that was not the rule.

Inflation is a product of market forces. It has been in existence in one form or another since the dawn of 'trading'. (Conversely DEflation can also exist because of market forces.)

Do some research on the Plague - and what happened to prices.

Perhaps I expressed it wrong. There have been ups and downs of prices throughout history caused by extraordinary circumstances, but nothing like the consistent rise of the last century. After all, the price of betrayal only rose from 20 pieces of silver in 1400 bc to 30 pieces in 26 ad

Kathie Freeman said:

Perhaps I expressed it wrong. There have been ups and downs of prices throughout history caused by extraordinary circumstances, but nothing like the consistent rise of the last century. After all, the price of betrayal only rose from 20 pieces of silver in 1400 bc to 30 pieces in 26 ad

Click to expand...

Then there was the outrageous inflation that hit Spain after the conquests in the Americas. That inflation hit most of Europe to a limited degree, and after the first wave passed there was price stability in some countries for more than two hundred years, at least for some commodities. There was inflation during the Roman empire also, and it was caused by governmental policies. In ancient times there were a few periods of extreme deflation, because rulers didn't understand money,so they tried to corner the market on it. Until the 18th century inflation was mostly a local matter, because economies weren't tied so closely together.

Someone pointed out that if one takes the price tat the Dutch paid for Manhattan and adjusts for inflation, the number comes out around what the present total fair market would be. I haven't done the calculation, but that may be true.

There have been ups and downs caused by mundane circumstances as well. On both large scales and small scales. (Everything from shaving coins to local illness to poplulation migration)

Our ability in modern times to amass and track data makes data points in the past seem 'sudden' or irregular. The course of the hundred years war caused inflation and monetary disruptions for over a century throughout Europe.

Try this, too!

This shows several ways to calculate 'worth.' It's not just inflation.

http://www.measuringworth.com/calculators/uscompare/result.php

That site might be useful. I'll inspect it later.

WriteKnight said:

Inflation is a product of market forces. It has been in existence in one form or another since the dawn of 'trading'. (Conversely DEflation can also exist because of market forces.)

Do some research on the Plague - and what happened to prices.

Click to expand...

Price increases/decreases are the result of market forces (eg, scarcity of a product drives the price up).

Inflation is the result of governments inflating the monetary supply (either by shaving gold off of coins or by printing more money (so to speak))

"In economics, inflation is a rise in the general level of prices of goods and services in an economy over a period of time. When the price level rises, each unit of currency buys fewer goods and services; consequently, inflation is also an erosion in the purchasing power of money – a loss of real value in the internal medium of exchange and unit of account in the economy."

Wickipedia and other definitions. CAN be govt caused, but not necessarily. Can have other causes as well.

"High rates of inflation and hyperinflation can be caused by an excessive growth of the money supply. Views on which factors determine low to moderate rates of inflation are more varied. Low or moderate inflation may be attributed to fluctuations in real demand for goods and services, or changes in available supplies such as during scarcities, as well as to growth in the money supply. However, the consensus view is that a long sustained period of inflation is caused by money supply growing faster than the rate of economic growth"

WriteKnight said:

"In economics, inflation is a rise in the general level of prices of goods and services in an economy over a period of time. When the price level rises, each unit of currency buys fewer goods and services; consequently, inflation is also an erosion in the purchasing power of money – a loss of real value in the internal medium of exchange and unit of account in the economy."

Wickipedia and other definitions. CAN be govt caused, but not necessarily. Can have other causes as well.

"High rates of inflation and hyperinflation can be caused by an excessive growth of the money supply. Views on which factors determine low to moderate rates of inflation are more varied. Low or moderate inflation may be attributed to fluctuations in real demand for goods and services, or changes in available supplies such as during scarcities, as well as to growth in the money supply. However, the consensus view is that a long sustained period of inflation is caused by money supply growing faster than the rate of economic growth"

Click to expand...

That bolded section is a Keynesian nod to Classicalist economics to forestall further editing of the WiKi. In other words, there is more varied disagreement on HOW THINGS WORK in economics than any other discipline, in my opinion. The section prior to that is the Keynesian view of inflation. (to many of us, it's just smoke and mirrors to detract from the fact that inflation is caused by government (or other) manipulation of monetary policy.)

The term inflation has become more commonly used to describe price increases in general although that was not the original use of the word in this context and is a disputed usage to a certain extent. Inflation strictly means an increase in the monetary supply or a decrease in value of the currency. Many things may cause a decrease in value of a currency. If it is backed by a government, then wars, and the destabilization of that government can devalue the money. In any extent, it is a monetary side problem.

Price variation due to market pressures are typically not described as inflation. Although it is mostly true that if all prices are going up, you have inflation, that does not mean that market pressures are making the prices go up, it means that something is going on with the money supply.

Anyway, it is disputed so you are going to see waffling around in Wiki entries.