What is Money? What is Inflation?

What is Money? What is Inflation?

Money is also that thing we put in monetary models of the price level and the business cycle.  That begs raises the question of whether the price level is determined by shocks to the medium of exchange, or shocks to the medium of account.  Once we answer that question, the business cycle problem will also be solved, as we all agree that unanticipated price level shocks can trigger business cycles.
So now we have to figure out what we mean by the term ‘inflation’.  I’d like to propose 5 criteria:

1. Inflation is a general rise in the sticker price of goods.
2. Unanticipated inflation helps borrowers and hurts lenders.
3. When wages are sticky, deflation causes unemployment.
4. Inflation reduces the value of the medium of account.
5. Inflation reduces the value of the medium of exchange.