I understand local inflation (at least I think I do). What I don’t understand is how we can have inflation being measured across the globe. If it is a closed system surely the amount of inflation somewhere is counteracted by deflation elsewhere?
What am I missing?
edit: source of global inflation:
[https://econ.trib.al/Vqhi0Ae](https://econ.trib.al/Vqhi0Ae)
In: Economics
Imagine two people stranded on an island.
One finds coconuts. Other catches fish. To make their diet more varied, they exchange some fish and coconuts between each other.
The coconut guy raises price of coconuts every day, demanding more fish for a coconut. Fish guy really likes them and doesn’t complain.
Why should anything change in this very closed system? There’s definitely an end, where fish guy can’t even get a single coconut for all his daily catch of fish, but by that moment, inflation has been already insane (would have decimated any real-word economy).
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