What basic macroeconomic principle explains why money earned in the future is worth less than money in the present?

The principle that explains why money earned in the future is worth less than money in the present is inflation. Inflation refers to the general increase in prices and the fall in purchasing power of money over time. When inflation occurs, each unit of currency buys fewer goods and services than it did in the past. Therefore, if you receive money in the future rather than having it now, the purchasing power of that future money is reduced due to inflation.

Conceptually, this idea is also linked to the time value of money, which suggests that a dollar today is worth more than a dollar tomorrow because money can earn interest or generate returns if invested. Given the effects of inflation, the ability to invest and grow that dollar today makes it even more valuable compared to when it is received in the future.

GDP, unemployment, and recessions pertain to broader economic health metrics and conditions but do not specifically address the value of money over time in the same way that inflation does.