As title says, with the followup question whether your answer says anything about whether central banks have been successful (on average) in controlling inflation at a desirable level?
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There were certainly prolonged bouts of high inflation before central banking. EG in the 16th/17th centuries and in late Roman times. Fiat currencies have been around forever – the first currencies were temple notes (on clay pegs) in Sumer, and Bank of England notes were the bulk of local exchange in Britain from the mid 18th century (without prolonged inflation).
A prominent economist recently noted that quantity theories of money are clearly wrong – he just did not have an alternative. Also clearly, some central banks have been successful in controlling inflation, usually by suppressing the lower-classes.
Yes it’s always been a problem. Debasing the value of currency due to many different emperors printing cash to fund civil wars was a big part of why the Roman Empire collapsed.
In this time inflation took the form of using cheaper metals to adulterate the coin meaning it physically represented a less valuable piece of metal. Another inflationary move was to decrease the size of coins.
Soldier pay kept on being boosted to keep soldiers loyal, and taxation networks were often wrecked by war, so the Roman Empire saw extreme inflation in the 2nd and 3rd centuries.
It contributed to the rise of the “villa system” where wealthy Roman’s sought to create self sufficient “households”. Transactions within a household weren’t taxable and didn’t use cash as an exchange so this was a useful economic innovation at the time for those wishing to protect their extreme wealth. In Rome, a “household” included all slaves and dependents so these “households” could be small towns and entire villages operating as a closed economic unit. Another way of saying this is that inflation became so bad, large parts of the economy reverted to essentially a barter system under the rule of a local powerful lord.
The other effect of inflation was to ruin the labor market so instead of working for coin, free laborers became less free and tied to the land as serfs (“coloni”) instead of exchanging labor for coin, because coin became useless, the contract became access to land to feed yourself in exchange for some of the product of that land and rent going to the lord of the villa.
Inflation was so bad in the Roman Empire it played a key role in creating feudalism.
Yes, it is just supply demand. The Hispanic loot so much gold and silver from the native that the value of these metal plummet.
Others have given answers, so I’ll just add [this](http://www.aboutinflation.com/inflation-rate-historical/us-inflation-rate-historical-chart), which shows historic inflation for the US. Inflation is far more stable now.
Inflation is inherently tied to the time value of money. It is better to have money today than it is to have money tomorrow. Which in turn makes tomorrow’s money worth less than today’s money.
If your economic system is based on gold, there is always more gold being mined. If your economic system is based on animal pelts and crops you’re always having grain rot or be eaten by rats.
Economics is really more about psychology than it is about anything objectively real. Inflation really only ever becomes a problem when something is happening to quickly change people’s perceptions of how much stuff they have. If rats are swarming over your grain supplies you’ve got a problem, if the cost of a gallon of gas is 20 bucks you’ve got a problem, if the gold coins you got are slightly smaller than the last batch, you’ve got a problem.
As to central banks… It is tempting to view their work through the lens of what they could have done (given the benefit of hindsight) when you should be considering them through the lens of what the alternative would have been. If you think inflation is bad now for example, imagine what it would have been had Trump had direct personal control over monetary policy. Or if congress was now trying to debate what the national prime lending rate should be. You need only look to Venezuela to see the results of that kind of power.
Central banks, for all their failures, end up doing a better job than any currently available alternative.
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