[empalms]

It's been a while, but I vaguely remember an economics professor of mine stating that it's not inflation which is the core issue for people, firms, and economies, but an increased price volatility which positively correlates with high inflationary rates. The take-away was that when people can reasonably predict what inflation might be MoM, or QoQ, businesses and individuals are able to price transactions and required rates of return accordingly.

So yeah, by that understanding, inflation can be normal in a healthy functioning economy. It is uncontrolled/unpredictable inflation that's problematic.*

*Grain of salt, I'm not an economist and it's been some time since I've seriously studied the subject matter. Commenting to join the discussion

[bko]

There are huge inefficiencies with high inflation, even if predictable.

For instance, if you know your dollar is worth considerably less every day, you're more likely to go spend it on things that you may not need as long as they retain value. Barter is inefficient as well. You'll be willing to wait on line as soon as you receive your paycheck. You'll fill up your tank more often. There's expenses with adjusting people's pay to account for inflation and keeping track of what a "reasonable" price should be or whether you're getting fleeced. I agree uncertainty is a huge problem, but even high anticipated inflation is a huge pain in the ass.

That's not even considering the capital controls that are often put into place that prevent you from holding stable assets. So you're stuck holding this depreciating asset or you're bending over backwards to buy as much stuff as possible to retain you wealth.

[empalms]

That’s the argument - higher inflation is correlated with lower levels of price stability and hampers one’s ability to predict. Other commenters have also (rightly, I think) pointed out the ‘stickiness’ of wages in the short term being an additional reason to take seriously even moderately higher levels of inflation

[collegeburner]

No, prices and wages are stickier and often don't move as fast as you think, even with digital communication. Menu and shoeleather costs remain serious harms of inflation even if you have some system where it is predictable. Anyway, it is not, look at how many macro people say for months "inflation is transitory" but no.

[empalms]

I’d agree on the wages side! Good point. Price stickiness seems dependent on the nature of the goods and contracts, I would expect at least

[collegeburner]

I phrase that poorly, the problem is exactly that price stickiness is not uniform and the disparity is a big driver of inflation.

[remarkEon]

Wages are “sticky”, and do not adjust as fast as prices for goods and services, and certainly don’t change much MoM/QoQ outside maybe a few niche industries.

That’s the problem with high or relatively high inflation.

The professor is correct, though, that consistent and predictable inflation is at least less bad than inconsistent and unpredictable inflation.

[empalms]

Good points. I think the point he was trying to make (or the one I recall, at least) was that higher inflation tends to result in more volatile price moments which damages economies more severely than that of cost increases outpacing earning power.

I do agree with you though, wages being generally sticky would make any moderate inflation, even predictable, a considerable negative on the economic fortunes of most individuals.