Is inflation inevitable in all successful economies? Throughout history, has there ever been a society that maintained 0% inflation for a long term while still maintaining a good quality of life?
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Well, inflation is a fairly arbitrary measure of a phenomenon that isn’t that well understood and has only really been studied in certain kinds of societies, so it’s hard to make any general statements about what might be possible.
Inflation is usually measured by comparing the price in a given currency of a given basket of goods over time. Currencies can work in all kinds of different ways, and the choice of basket of goods is somewhat arbitrary, so who knows what’s possible? For example, you could imagine a highly segmented society in which there isn’t really a meaningful overall inflation rate, but instead different rates in different parts of the society.
All we can really say is that, in contemporary capitalist societies, both deflation and very high inflation tend to be associated with economic problems. But we don’t really know which direction the causality goes in, and a recurring problem with economics is that our understanding of the economy feeds back into the economy, leading to self-fulfilling prophecies. For example, maybe the reason why economies with 2% inflation tend to do well is because everyone believes they will do well, leading to increased investment and confidence.
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