In the short term, price inflation can happen due to an increase in the velocity of money, which can happen based on crowd psychology.

But in the long term, in a free market society not at war (at least), prices go down in real terms not up. Because we get better, faster, cheaper, more industrialized, greater efficiency, etc.

Another exception that just came to mind is scarcity.  Some things get more and more scarce and those will go up in value.  Real estate, rare minerals, etc, go up in price due to supply constraints.

But the primary reason that prices go up in the long term is monetary inflation. 

 That's why I say it helps a lot, but prices depend mainly on supply and demand… there are many more things involved, as you say 

 I'd like to add that the monetary inflation is intentional.  It is not *just* profligate government spending out of borrowing.  It is also from a belief that currency *should* go down in value in order to incentivize people to spend their money faster, which drives an economy to grow faster than it would have otherwise. 

 Concur this is one of the justifications for maintaining inflation and government (via central bank) control of the money supply. 

A side effect is its economic distortion from normal in that it incentivizes consumption over savings.