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How inflation helps the stock market set records
The news regularly reports that this or that stock market index has reached new heights. What does that really mean? Economies tend to grow, whether it’s their population or their productivity, so it’s natural that their economic statistics would also increase. Prices generally increase as well, which means that even if an economy doesn’t grow, economic measures will increase. That is, if those measures aren’t cleared of general price inflation (“deflated”). Eventually, any stock index will also appear to increase over time. It will have ups and downs—sometimes big ones—but eventually it will set new ... (full story)