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Inflation, R.I.P.

When it died last month at the hands of a sluggish economy and a Federal Reserve intent on maintaining interest rates at zero, inflation was thought to be several thousand years old -- although a specific age has not been released by the family.

The immediate cause of death was this morning's report on the consumer price index: 0.0 percent.

Paul Volcker, the former chairman of the Fed who had a troubled relationship with inflation while it was alive, had this to say about its passing: "There was a perception that inflation and growing inflation was a big problem, and I couldn't have gotten by with the policies we followed unless there was a feeling in the country that somebody ought to do something."

Volcker famously broke inflation's back in the early 1980s, an injury from which it never recovered.

Nobel Prize-winning economist Paul Krugman had harsh words for the departed: "It's very hard to get inflation in a depressed economy."

Inflation is survived by cousins, most of whom live overseas. Family in Zimbabwe, Venezuela, Argentina and Iran tell us they are not doing interviews.

About the author

Kai Ryssdal is the host and senior editor of Marketplace, public radio’s program on business and the economy.
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A lot of the comments here remind me of climate change deniers who say, "today is {cold} or {hot} therefore there is no climate change.

Inflation isn't present just because the price of goods goes up--that happens due to scarcity as well as other market issues. You can't have inflation without wage inflation, and wages are barely budging if at all.

There is no inflation, simply.

Right on Dude, didn.t see your comment, inflation was in the way! You say it all in one smooth sentence! Thanks, Chris Comstock.

If u all out there, like the disabled vets, disabled people, and us white and Afro Americans out there seeking jobs that have been taken by illegal/legal aliens, how do you realley feel about our great Obama care? Personalley I think it sucks! Chris Comstock.

I will let the economists explain why in our system inflation cannot die. It is also of value to paraphrase Krugman's extremely intuitive statemen "it is hard for inflation during a recession".

However, I find very telling that the author talks about Argentina. I have first hand experience with several recessions in Argentina, and I have been concerned about the "Argentinization" of the US economy since the recession. Couple of more arguments against the "declaration", and one everyday example of how the US is looking like Argentina of the end of the XX century:
Inflation is hidden in packaging. Have you noticed that all groceries come in smaller packages than 10 years ago? 40 grams less here, 10% less there... same price for less quantity everywhere...
This week my wife commented "how small the rotisserie chicken" was. No wonder, it is sold by unit not by weight.
The "Argentinization" has also taken a dangerous twist. The US government is not doing what makes sense for the benefot of the country, but for the short term political discussion. Businessmen wait for the election results to make decisions.
I trust there will be a renewal and turn around, but it is a little scary...

Nice act Kai but, like all the other members who commented on this story, I can't disagree more. You must be living under a rock if you think inflation is dead. Perhaps the items in the inflation basket haven't changed prices, but reality is that prices have gone up.
For example, have you rented an apartment in NYC lately? Have you purchased a monthly subway pass? Can you remember the last time you spent a two dollars for a tomato? When was the last time you were able to get a respectable lunch for $5?
The reality is, inflation alive and well.

One final point, if inflation is dead, what explains the near record highs of the stock market? Could it be prospects of increased revenues or profitability? Maybe, but not likely. I would venture to say that the stock market has gone up because holding stocks is a hedge against inflation. Please, someone prove me wrong...

One final point, if inflation is dead, what explains the near record highs of the stock market? Could it be prospects of increased revenues or profitability? Maybe, but not likely. I would venture to say that the stock market has gone up because holding stocks is a hedge against inflation. Please, someone prove me wrong...

No! Inflation is very alive and well if you're in transition (unemployed) and watching gas prices go up 30% in a week. It's the CPI that is really dead as far as any meaningful measure for the middle class. Don't confuse the two as one and the same. The CPI is a figment of some bureaucrat's imagination to hide the real truth from the middle class and to keep deposit and savings account interest rates low for the retired.

WTF?!?!? Have you been to the grocery store or bought gas or gone to the hospital? Its all over. Looks at the sizes and quality of the products you buy. Also, prices SHOULD have been falling after the bubble popped, not slowly rising, THAT is inflation. Yes you can have inflation when they economy is in a funk, just keep printing money. The definition of inflation is creating money without an equivelent amount of goods and services to match. Increases in the price level, or sustaining bubble levels, is just the symptom.

I'm sure inflation is dead if you don't eat food, drive a car, or pay for health insurance.

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