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This was a point I made when the pandemic shortages kicked off. The entire world's purchasing habits shifted towards guns, food, prepping gear, and TP. The pric

This was a point I made when the pandemic shortages kicked off. The entire world's purchasing habits shifted towards guns, food, prepping gear, and TP. The prices of those items skyrocketed (when they could be found). I predicted at the time that, even though everyone was experiencing massive price inflation in the stuff we were actually buying, largely due to increased demand, it was not going to show up in the numbers because of the way inflation is calculated. Put another way, if I'm in the market for housing, healthcare, groceries and gardening supplies, and the prices of all those things around skyrocketing, then it doesn't matter much to me if the price of cars is down 20% since the crisis began. The inflation measures, however, don't account for the shifts in purchasing demand, which should weight the measure heavily.

tomatocracy 6y ago
This is true. There's another even more interesting question related to the effects lockdowns etc had on the economy I think. How do you even measure inflation with your old basket when some of it becomes unavailable anywhere (some services) and for other parts half of the venues where they were sold (non essential retail outlets) are now shut? My conclusion is that statistics about what happened to the economy during 2020 (ie the month to month path) are likely to be very unreliable. This might have implications for policymaking in future which I don't think have really been explored anywhere.