Isn’t it inflation if you pay more for a product now than a few years ago? Not necessarily. If you pay a dime more for a loaf of bread or a buck more for a basic, white T-shirt, that isn’t inflation. If you pay $800 more for a new car than you did a decade ago, that is inflation. Why? Because, a loaf of white bread or a T-shirt is much the same today as it was a decade ago. But your new ride has a boatload of additional technology.