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I agree that housing costs should be included in some way, but this is hard to do correctly because – at least if you buy – housing is an investment good, not a
by stdbrouw 8y ago
I agree that housing costs should be included in some way, but this is hard to do correctly because – at least if you buy – housing is an investment good, not an expense. In the US the bureau of labor tries to calculate the "owners' equivalent rent"; the EU on the other hand considers the cost of housing and inflation to be strictly separate measures. Rents are generally included, though.
- humanrebar 8y ago> ...housing is an investment good... Only if you realize the appreciation somehow.
- maccard 8y agoYou realize it by default at the end of a mortgage when you're not paying it anymore.
- howard941 8y agoOr you don't because you literally default on the mortgage. Or perhaps you rent and it's really hard to consider housing an investment. It's more like some hybrid of necessary living expense optionally coupled to a consumer investment not amenable to being written off as a tax loss.
- IkmoIkmo 8y agoThat's true at the EU level for the inflation measure of the European Central Bank. But national governments tend to have their own (modified) versions of the HCIP which do include things like owner-equivalent rent or mortgage rates. Not trying to argue semantics here, your point is completely correct but it may be confusing to say 'the EU (as if, as a whole) considers housing and inflation as separate measures'.