Editing Inflation (section)

===Ancient Europe===

Alexander the Great's conquest of the [[Achaemenid Empire|Persian Empire]] in 330 BC was followed by one of the earliest documented inflation periods in the ancient world.<ref name=parkin/> Rapid increases in the quantity of money or in the overall [[money supply]] have occurred in many different societies throughout history, changing with different forms of money used.<ref>{{Cite news|last=Dobson |first=Roger |title=How Alexander caused a great Babylon inflation |newspaper=[[The Independent]] |date=January 27, 2002 |url=https://www.independent.co.uk/news/world/europe/how-alexander-caused-a-great-babylon-inflation-671072.html |archive-url=https://web.archive.org/web/20110515070120/http://www.independent.co.uk/news/world/europe/how-alexander-caused-a-great-babylon-inflation-671072.html |archive-date=May 15, 2011 |access-date=April 12, 2010 |url-status=dead |df=mdy-all }}</ref><ref>{{Cite book  | last = Harl  | first = Kenneth W.  | author-link = Kenneth W. Harl  | title = Coinage in the Roman Economy, 300 B.C. to A.D. 700  | place = [[Baltimore]]  | publisher = [[The Johns Hopkins University Press]]  | year=1996  | isbn = 0-8018-5291-9  }}</ref> For instance, when silver was used as currency, the government could collect silver coins, melt them down, mix them with other, less valuable metals such as copper or lead and reissue them at the same [[Real versus nominal value (economics)|nominal value]], a process known as [[debasement]]. At the ascent of [[Nero]] as Roman emperor in AD 54, the [[denarius]] contained more than 90% silver, but by the 270s hardly any silver was left. By diluting the silver with other metals, the government could issue more coins without increasing the amount of silver used to make them. When the cost of each coin is lowered in this way, the government profits from an increase in [[seigniorage]].<ref>{{cite web |url=http://www.mint.ca/royalcanadianmintpublic/RcmImageLibrary.aspx?filename=RCM_AR06_E.pdf |title=Annual Report (2006), Royal Canadian Mint, p. 4 |publisher=Mint.ca |access-date=May 21, 2011 |archive-date=December 17, 2008 |archive-url=https://web.archive.org/web/20081217200449/http://www.mint.ca/royalcanadianmintpublic/RcmImageLibrary.aspx?filename=RCM_AR06_E.pdf |url-status=live }}</ref> This practice would increase the money supply but at the same time the relative value of each coin would be lowered. As the relative value of the coins becomes lower, consumers would need to give more coins in exchange for the same goods and services as before. These goods and services would experience a price increase as the value of each coin is reduced.<ref>{{Cite web |last=Shostak |first=Frank |date=2008-06-16 |title=Commodity Prices and Inflation: What's the Connection? |url=https://mises.org/library/commodity-prices-and-inflation-whats-connection |access-date=2023-11-19 |website=Mises Institute |language=en}}</ref> Again at the end of the third century AD during the reign of [[Diocletian]], the [[Roman Empire]] experienced rapid inflation.<ref name=parkin/>