eli5: Since inflation pushes the price of items up every year, does that mean we’re eventually going to get to a point where it’s normal to pay like $20 for a carton of milk?

Question

eli5: Since inflation pushes the price of items up every year, does that mean we’re eventually going to get to a point where it’s normal to pay like $20 for a carton of milk?

In: Economics

Answer 1

Yes. In 1900, a half gallon of milk cost 13 cents. Not 13 dollars, 13 cents. A pound of butter was twice that, at 26 cents, and a 10lbs bag of potatoes cost 14 cents. You might think “wow, they must’ve been stuffed!”, but no; they also made a lot less money. In fact, these goods are generally *cheaper* today than they were back then, when taken as a % of someone’s weekly paycheck.