Time to Admit, then Douse, Our Inflation Fire

Inflation can be described in many ways, but it's difficult to define. Still, inflation is easily perceived when rising prices reduce purchasing power and, hence, distort resource allocation.

Inflation in a narrow sense means that prices for consumer goods rise, increasing day-to-day living costs. However, inflation in a broader sense also includes property prices, especially in economies with low home ownership rates and a big need for urbanization, such as China's. In these economies, property price hikes inevitably reduce purchasing power.