Inflation seems to be a relatively new thing in economics, only being a major concern since about 1940.
Looking at [this UK Currency graph](https://www.google.com/url?sa=i&url=https%3A%2F%2Fmonevator.com%2Fa-history-of-uk-inflation%2F&psig=AOvVaw2m1_C7lFBlK_s-ePJDySaV&ust=1691140545682000&source=images&cd=vfe&opi=89978449&ved=0CBAQjRxqFwoTCOCx8s2TwIADFQAAAAAdAAAAABAJ) or [this US graph](https://images.squarespace-cdn.com/content/v1/50060e33c4aa3dba773634ec/1464789250138-XL20G32RKBAYP87JGP74/image-asset.png), inflation/deflation was not a continuous thing until the modern era.
Is this because of fractional reserve banking, or constant government deficits in both countries? Or both? What changed in economic policy – perhaps the funding required for modern government programs?
Or perhaps this effect isn’t as new as I perceive – at least in the case of the United States. [This graph](https://upload.wikimedia.org/wikipedia/commons/thumb/2/20/US_Historical_Inflation_Ancient.svg/1200px-US_Historical_Inflation_Ancient.svg.png) shows inflation and deflation to be evident in the past, but they balanced: so why don’t they now?
Surely an idealised society wants very little inflation, maybe around 0.5%, just enough to allow for debt to deflate and ‘incentivise investment’, but nowhere near as much as today’s salary-eroding amounts.
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Traditionally, inflation peaked around wartime as a government debased its currency (think: money printing) to wage the war. Then after the war, the government would repeg the currency, pay down the debt, and deflate. Prices would stabilize if not decrease.
In the era of modern central banking (creation of the Fed on your graph) inflation is the express policy.
Fractional reserve banking is major tool in this endeavor and contributes to the credit-fueled booms and eventually results in the contractionary busts.
What changed? There was a revolution in economics by Keynes in the WW2 era such that modern central banks now view consumption as the backbone of an economy. Thus, any time there’s economic trouble, the “solution” is lower interest rates, credit creation, and money printing, to cause people to spend more money, causing prices to increase even further.
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