I used to order from the local pizza shop named Derby’s. That small pizza with one topping was $4.25. An inflation calculator using the U.S. Inflation Index will give me the price of that pizza in today’s dollars:
- $4.25 in 1990 is equal to $8.34 in 2019
The truth is, I am still an avid consumer of pizza. In fact, I get a small Neapolitan pizza with one topping each week after my yoga class.
- Pizza Fire (one small pizza with one topping) = $9.49
If I had stashed $1,000 in cash in 1990 and I used the money to buy pizza in 2019, I’d get less than half the pizza. So again, inflation is the cost of a good rising over time.