Inflation is prices rising on average.

Price the same basket again, and compare the totals.

Food +4%, rent +3.3%, energy +3%, transport 0%, phone −4%.

The basket costs $1,904.20 now, up 2.9%: index 102.9.

At 3% a year, prices double in about 23 years.

After ten years at 3% a year, the index is 134.4.

Cash loses value: $100 buys $74.41 of year-0 goods after 10 years.

After 20 years, $55.37.

Two simplified causes: more money chasing the same goods.

And costs passed on: when energy or wages rise, prices rise too.

Measured this way, inflation is the change in the index from year to year.