Why is inflation bad?

Source: EconLog
by Scott Sumner

“With the 12-month rate of CPI inflation now at 6.2%, inflation is once again in the news. Should we worry about inflation? If so, why? I have what might seem like contradictory views on inflation. On the one hand, I’m an inflation hawk who came of age in the 1970s and I view the high inflation of that decade as a major policy mistake. On the other hand, I’ve argued that inflation doesn’t really matter, that the so-called ‘welfare costs of inflation’ are better measured by looking at NGDP growth.” (11/10/21)