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Inflation
From an award-winning professor of economics, an accessible and comprehensive introduction to what causes, and what can address, increases in the cost of living.
Anyone who has balked at the price of a carton of eggs or lamented the cost of a tank of gas in the past five years has experienced the sting of inflation. What causes inflation? When has it surged historically? And which policies best address it? In this concise and timely volume, economist Martha Olney explains what inflation is, its patterns over time, its underlying causes, the controversial Phillips Curve and its possible relevance, anti-inflation policy, and more. From the obvious rise in the cost of living to the more discreet decrease in quality of goods and services, Olney provides an indispensable introduction to the concept of inflation and what we can do to address its effects.
Anyone who has balked at the price of a carton of eggs or lamented the cost of a tank of gas in the past five years has experienced the sting of inflation. What causes inflation? When has it surged historically? And which policies best address it? In this concise and timely volume, economist Martha Olney explains what inflation is, its patterns over time, its underlying causes, the controversial Phillips Curve and its possible relevance, anti-inflation policy, and more. From the obvious rise in the cost of living to the more discreet decrease in quality of goods and services, Olney provides an indispensable introduction to the concept of inflation and what we can do to address its effects.
296 pages, Paperback
Published September 23, 2025
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Displaying 1 - 2 of 2 reviews
January 24, 2026
Inflation is a timely subject, but after such a long period of price stability in advanced economies, I had a hard time finding recent books about inflation for a lay audience. I very briefly tried a book by business media mogul Steve Forbes, asset manager and gold standard advocate Nathan Lewis, and journalist and novelist Elizabeth Ames. It quickly proved to have a (surprise!) Chicago School neoliberal lens, blaming workers' demands for higher wages and large government as the drivers of rising prices. I was looking for a more neutral starting point.
Then, I found this. After some introductory basics in the first few chapters, Ms. Olney admits that, 'The shortest answer to the seemingly simple question, "What causes inflation?" is "We're not altogether sure."' Some economists "are absolutely darn-tootin' confident in their favorite explanation of inflation." But we don't have a definitive answer. Such refreshing honesty. Hence the rather blunt policies of slowly raising interest rates, then waiting to see if inflation slows, which Olney covers in detail in chapters 5 and 6. She also gives a crash course in understanding knowledge and models as contextual and built on assumptions, as opposed to either absolute Truth or battling opinions, before presenting the current, leading ideas of the causes of inflation, along with their caveats. She doesn't advocate for one over the others, she just explains them in a straightforward style.
For instance, the contender that Forbes et. al. presented as The Only Explanation, is part of what economists know as the quantity theory of money. The larger theory is a simple model that explains hyperinflation very well. But, despite Forbes' et. al.'s support for this theory, it doesn't explain why inflation varies from year to year in ranges from 2 to 12 percent. In other words, like many things involving humans, there are a lot of approximations, exceptions to the rules, and complications in real-world economies. Models only capture so much.
Olney's presentation of quantity theory did explain why Forbes' co-author is such a big proponent of the gold standard—it tightly restricts an economy's money supply, and therefore is supposed to control inflation. However, it also assumes that real gross domestic product and the amount of money changing hands within an economy (velocity) are stable (HA!), and that money is narrowly defined as currency, excluding all other assets that meet the same criteria of value and exchange. There are also reasons the money supply can increase other than workers demanding higher wages. Economic growth is one of them. Central banks, like the US Federal Reserve—the "Fed"—tend to subscribe to the aggregate supply and aggregate demand model for guiding their policy, which is probably why Forbes et. al. complained "central banks devalue money; prices shoot up."
The focus here is centered on the US. There is some math, but it's pretty basic and there isn't much, with the more complicated stuff summed up in the notes. As Ms. Olney says on the very first page of chapter 1, you can skip over it if you like and still get a lot out of the book. Said notes also contain a wealth of information on where to look up detailed data if you're interested, and further reading suggestions if you're looking for more depth. Every chapter ends with a summary of its key points. There's a handy glossary of terms, like real gross domestic product and velocity. New terms are introduced in italics within the text, so they stand out. You could do worse than start here.
This book is part of the MIT Press Essential Knowledge Series. Like Oxford University Press' Very Short Introductions series, each book presents a brief presentation on the basics of its subject matter. While Oxford covers general areas in the arts and sciences, like ideology, the classics, or mathematics, the MIT series tackles more discrete subjects of more recent interest, like large language models, the infrastructure of international standards, and this. I'll definitely be checking out more from this series in the future.
Then, I found this. After some introductory basics in the first few chapters, Ms. Olney admits that, 'The shortest answer to the seemingly simple question, "What causes inflation?" is "We're not altogether sure."' Some economists "are absolutely darn-tootin' confident in their favorite explanation of inflation." But we don't have a definitive answer. Such refreshing honesty. Hence the rather blunt policies of slowly raising interest rates, then waiting to see if inflation slows, which Olney covers in detail in chapters 5 and 6. She also gives a crash course in understanding knowledge and models as contextual and built on assumptions, as opposed to either absolute Truth or battling opinions, before presenting the current, leading ideas of the causes of inflation, along with their caveats. She doesn't advocate for one over the others, she just explains them in a straightforward style.
For instance, the contender that Forbes et. al. presented as The Only Explanation, is part of what economists know as the quantity theory of money. The larger theory is a simple model that explains hyperinflation very well. But, despite Forbes' et. al.'s support for this theory, it doesn't explain why inflation varies from year to year in ranges from 2 to 12 percent. In other words, like many things involving humans, there are a lot of approximations, exceptions to the rules, and complications in real-world economies. Models only capture so much.
Olney's presentation of quantity theory did explain why Forbes' co-author is such a big proponent of the gold standard—it tightly restricts an economy's money supply, and therefore is supposed to control inflation. However, it also assumes that real gross domestic product and the amount of money changing hands within an economy (velocity) are stable (HA!), and that money is narrowly defined as currency, excluding all other assets that meet the same criteria of value and exchange. There are also reasons the money supply can increase other than workers demanding higher wages. Economic growth is one of them. Central banks, like the US Federal Reserve—the "Fed"—tend to subscribe to the aggregate supply and aggregate demand model for guiding their policy, which is probably why Forbes et. al. complained "central banks devalue money; prices shoot up."
The focus here is centered on the US. There is some math, but it's pretty basic and there isn't much, with the more complicated stuff summed up in the notes. As Ms. Olney says on the very first page of chapter 1, you can skip over it if you like and still get a lot out of the book. Said notes also contain a wealth of information on where to look up detailed data if you're interested, and further reading suggestions if you're looking for more depth. Every chapter ends with a summary of its key points. There's a handy glossary of terms, like real gross domestic product and velocity. New terms are introduced in italics within the text, so they stand out. You could do worse than start here.
This book is part of the MIT Press Essential Knowledge Series. Like Oxford University Press' Very Short Introductions series, each book presents a brief presentation on the basics of its subject matter. While Oxford covers general areas in the arts and sciences, like ideology, the classics, or mathematics, the MIT series tackles more discrete subjects of more recent interest, like large language models, the infrastructure of international standards, and this. I'll definitely be checking out more from this series in the future.
December 7, 2025
Overall, a pretty good introduction to inflation with a US focus.
The only thing that is a bit off is something about the structure. The first five chapters set up the theory, and in the last chapter, there are bits where they show bits from the news about how the theory is implemented in the real world. For me, that should have been woven in with the rest of the text and not broken out at the end. Still a good book that I have been thinking about who the right person to pass my copy along to, so it is something I want to share.
The only thing that is a bit off is something about the structure. The first five chapters set up the theory, and in the last chapter, there are bits where they show bits from the news about how the theory is implemented in the real world. For me, that should have been woven in with the rest of the text and not broken out at the end. Still a good book that I have been thinking about who the right person to pass my copy along to, so it is something I want to share.
Displaying 1 - 2 of 2 reviews