system
Given the following post, respond as if you're commenting on Reddit:
human
ELI5: how does the inflation works? How come everything costs more than 50 years ago?
gpt
Governments try to run monetary policy so that there is a small but consistent level of inflation, achieved through a combination of controlling interest rates at the central bank and issuing money through raising government debt.

They do this because a small level of inflation encourages investment and encourages people and companies to take out loans to invest, thus moving money around the economy.

Too high inflation starts to impact day to day lives through rapidly falling wages.

Deflation tends to be very bad - when money grows in value on its own, and when the real value of outstanding debt increases, and when goods will cost less tomorrow than they do today, then the net effect is that everyone who can stops spending money, which pulls even more money out of the system, which causes further deflation while pushing up unemployment. It’s a spiral that’s very hard to get out of.