If the ideal inflation rate is around 2%, won’t money eventually become worthless?
In: Economics
Mathematically, sure if you consider a limit to infinity.
Realistically, no. A consistent 2% inflation over a lifetime (80 years) is about 5x appreciation in price. Which is not a lot. Humans don’t live forever.
In the US, for example, a loaf of bread probably costs around a quarter ($0.25) in 1960 and today, the average loaf is perhaps around $4.00. This is a 16x increase (far more than 2% annually) – the world didn’t fall into chaos. The data suggests that wages tend to follow inflation for the most part.
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