# Is there something that does not change its value that can be used to measure currency inflation?

Currency is represented as an exchange for something valuable, whether it be an object or work.

Prices for objects can change over time, depending on demand and supply, making objects unreliable to measure inflation. Most countries use precious metals to measure or establish currencies, but the prices for metals can also change over time. The amount of work it takes someone to complete a task depends on their physical and mental abilities, in which no two humans are the same.

Is there something that does not change its value that can be used to measure currency inflation?

• If there were, why would anything other than that be used as the basis of currency?
– Acccumulation
Oct 16, 2017 at 2:05
• since you know currency is about exchange rate and exchange rate depends on supply and demand which is govern by population which may shrink and grow and turns paranoia at moment notice... you get the drift.
– user6760
Oct 16, 2017 at 2:49
• Inflation itself is very hard to determine and more a question of definition. The answer is no, but not because nothing like that could exist in theory as the answers suggest but because inflation itself is the problem. I'd advice you to read how inflation is currently calculated and the massive problems with the various ways. You can of course always define a standard - problem solved
Oct 16, 2017 at 6:53

TL;DR -- No

Now for the fun part. No! No-no-no-no-no! And here's why...

Conditions change. Any commodity you can name will change in value over time, as various things happen:

• People stop wanting it (I mean, you can buy myrrh these days, but it's not a hot-ticket item)

• The availability changes (New mines show up, or old ones shut down)

• People start wanting it (use of gallium really spiked when electronics came along)

But wait! How about gold? It's been in demand for like evah, right? Well. Let's look at the inflation-adjusted price of gold, just for the last century:

Maybe you could try something like "one day's rations", ie enough food to feed the metric standard guy for one day. Of course, as agriculture gets more efficient... Hmm. The US gov't uses a "standard grocery basket" to measure inflation, that works ... okay, though politics occasionally sneak in.

Anyway. Short story -- nope.

For something reliable which does not change its value, it must be an everyday need for survival. Note that value does not mean price. In times of plenty, the price of a staple is lower than in times of low supply. The value of it lies in its ability to keep you alive.

The best index for that is food. You always need food. You can't eat diamonds, gold, or platinum. Computers are nice, but not necessary for survival. Clothing is very important but varies a lot in quality; it would have to be a staple for all people, which doesn't exist (e.g. a pair of jeans.), Housing can be simple or elaborate. So can food, but the basics - a loaf of bread, a gallon of water (if not free), an egg: these things have real and lasting value by which inflation can be measured.

If everything else vanished, we would still need bread, water, protein, etc. That's as basic as it gets in real life.

In science fiction, Oxygen might also be a basic necessity.

• Arguably, water would be a better metric than food. Food comes in many different forms, and you can't compare a loaf of bread to a slice of kobe beef. But water is just water, and you need more water than food.
– Phiteros
Oct 16, 2017 at 3:22
• However, the prices of bread, eggs and other foodstuffs changes frequently. A dozen eggs will be worth much more when chickens aren't laying, and worth much less when they are. Similar circumstances surround practically all foods.
– Tomskeleton
Oct 16, 2017 at 3:24
• The problem with this approach is the requirement of ONE single good to be the absolute value which everything else can be derived their value from. Water and oxygen are basic necessities, so you can't really just basing the absolute value on water, because oxygen, which is always needed, also qualify as absolute value. Then we are back to square one, where water and oxygen value will be relative to each other.
– Vylix
Oct 16, 2017 at 3:44
• @Tomskeleton - You're confusing value with cost. The value is real, and doesn't change. You can't say, "Oh, I don't think I need any water this week." Oct 16, 2017 at 12:44
• @Vylix - No; you will always need both to survive. You can't say, I'm short on cash today, so I think I'll skip the oxygen, nor can you say the reverse. Just because they both have value does not mean the value is relative. Oct 16, 2017 at 12:47

No. Value is a human term and is based on how much someone is willing to pay for something and as such value changes over time.

Quite often things like a loaf of bread or a Big Mac can be used to measure inflation between currencies

Inflation is usually measured by how much something changes value, not against something of static value.

• The Big Mac index is actually used to measure Purchasing Power Parity between different currencies, a more reliable measure than the exchange rate. PPP indirectly measures inflation as well, if your nations Big Macs are rising in nominal price (i.e how many hours of labour is needed to buy one) it may well be that your currency is undergoing inflation or some other effect which is devaluing it relative to other currencies.
– Thucydides
Oct 16, 2017 at 1:52

You are asking for a "thing" which value is unrelated to the malleable economic and social system to which it belongs. This is impossible, because the value of anything is a social construct that cannot be disentangled from its context. Prices are one mechanism in which such valuations are represented and aggregated via markets. As the conditions under which markets operate change, prices will change too.

For example, the Quantitative theory of money states that the price of goods and services ($P$) depend on the amount of money ($M$) and goods ($Y$) available in a given time, together with the technological and institutional conditions of society ($v$):

$$Mv = PQ$$

For changes in any of these variables, prices of things will change.

Another important reason why the value of everything is bound to change relates to the concept of opportunity cost. As the social and economic system changes, the opportunity cost of everything changes too. For example, if suddenly the wage you could earn for the same number of hours doubles, the value of all things that you could do with such time (e.g. leisure, voting, studying, etc) changes too. This will affect not only you but other individuals and hence impact market goods and services - and prices.