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They may be pumping cash but it doesn't seem that this is resulting in more consumer demand, which is what would lead to price inflation.
by lottin 7y ago
They may be pumping cash but it doesn't seem that this is resulting in more consumer demand, which is what would lead to price inflation.
- xxpor 7y agoThis is a good point. CPI is very good at missing the classes of products that have seen massive price increases: housing, education, and other large assets. For everyone who will respond "oh but CPI has a housing component": https://slate.com/business/2014/02/housing-inflation-the-cpi-is-a-disaster.html https://slate.com/business/2014/02/housing-inflation-the-cpi...
- lisper 7y agoHealth care.
- esoterica 7y agoUsing rents and imputed rents and not home values is the correct way to include housing prices. When you buy a house you are not only paying for a place to live, you are also speculating on a financial asset. The CPI doesn't measure investment prices (eg. it doesn't include stock values) so to isolate the true cost of housing as a separate metric from the speculative value of the investment, it looks at imputed rent instead.