Understanding inflation according to the Maltese

By Mario Schembri Wismayer

We live in a world were, for better or worse, inflation has become a household word. We read the word ‘inflation’ in the papers, we hear it being bandied about on the radio and on TV. Indignant people phone in on all the radio and TV shows to complain about it. But what is inflation really? As in most things, there is a huge difference between the mass of half-formed ideas and notions that the man in the street identifies as inflation and the very specific and narrowly defined meaning that the specialist attaches to the term.

Textbooks teach us that inflation is a process of rising prices. We measure the inflation rate as the percentage change in the average level of prices. A common measure of the change in prices is the retail price index. This shows how the goods and services bought by a typical household change from month to month.

MaltaToday decided to check out just how many people know the meaning of a word we use very commonly. Of the twenty or so people we contacted, most had an inkling that it had to do with finance and money. Some narrowed it down to the buying power of money. Others still were right on the mark, giving definitions or using groups of words that signalled that although laymen, they were very well aware of the meaning of inflation and of the impact it has on their lives.

Of course, we had the usual ration of howlers: "Inflation? Isn’t it when something overflows?" or, "Yes I know what inflation is, it’s when you blow something up , like a beach ball, for example."

The results we achieved were much better than those we got when we checked out the meaning of Mater Dei which means Mother of God Apparently, money is closer to people’s hearts than religion.