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Yes, any inflation measure is imperfect, but I'm not sure how it could even theoretically be perfect given changing technology. How do you properly measure subs

Yes, any inflation measure is imperfect, but I'm not sure how it could even theoretically be perfect given changing technology. How do you properly measure substitution effects that the iPhone has had relative to everything it imperfectly replaced; or the way services have replaced ownership in some areas of life? Given the complexity involved, the current measure seems to do the job well enough. As a side note, this mistrust of the CPI is something Eric Weinstein loves to bring up, too, with the same narrative about CPI being designed by politicians. After watching him try to convince economists [0][1] of the points made in this article (and avoiding questions that get specific or complex), I'm unconvinced I need to care. [Edited to add second, more relevant video] [0]: https://www.youtube.com/watch?v=h5gnATQMtPg https://www.youtube.com/watch?v=h5gnATQMtPg [1]: https://www.youtube.com/watch?v=zwiHv7xVQ_c https://www.youtube.com/watch?v=zwiHv7xVQ_c

nostrademons 5y ago
Is there a relevant time point in that presentation? It looks like the bulk of it is about inflation as in cosmology & physics, not economics.
- iamdamian 5y ago
  The video is a tad confusing. He has this idea that methods from physics and calculus should be ported over to economics to tackle unsolved problems like inflation, and he doesn't clearly delineate the two when speaking. (The economics portion starts about 16 minutes in.) I realized though that I didn't link to the best video to convey my point. Here is a more specific talk on inflation given by him and his wife to a room full of economists: https://www.youtube.com/watch?v=zwiHv7xVQ_c https://www.youtube.com/watch?v=zwiHv7xVQ_c Notably, the economists in the room point out that the inflation problem has already been tackled from a theoretical angle which does incorporate calculus. However, they say the resulting idea (the Divisia index) isn't practical for nation-level inflation measurements.
IfOnlyYouKnew 5y ago
This distrust of “politicians’ and public institutions (plus ‘the media”) is half of what’s eating away democracies all over the world. Actual corruption goes unpunished because “they are all corrupt” is easily turned from a cynical accusation into an excuse. Bitcoin is turning coal into flooding because people are afraid of the monetary crises of the 1920s (hyperinflation) and spooked by even the silliest conspiracy myths (“the FED is a private bank”). So, yes, measures of inflation aren’t perfect. But it’s “not perfect” in the most trivial sense: even some well-chosen single item (Big Mac?) gets you a measure of inflation that will be close enough most of the time. The actual basket improves it from maybe 90 % perfect to 98 %.
- nradov 5y ago
  Very few people are buying cryptocurrencies over fears of a USD monetary crisis. That's a fringe group. Instead must buyers are speculators trading on momentum and hoping to get rich quick before the bubble bursts. There are also a bunch of people using it to conduct illegal transactions (drugs, weapons, ransoms) or evade capital controls in repressive countries (China, Venezuela).
  - reedjosh 5y ago
    > Very few people are buying cryptocurrencies over fears of a USD monetary crisis. You should join some of the Telegram groups. My experience has been generally the opposite. Checkout the channel for LN support group PlebNet or the PirateChain channel for example.
    - deleted 5y ago
      [deleted]

nostrademons 5y ago

Is there a relevant time point in that presentation? It looks like the bulk of it is about inflation as in cosmology & physics, not economics.

iamdamian 5y ago
The video is a tad confusing. He has this idea that methods from physics and calculus should be ported over to economics to tackle unsolved problems like inflation, and he doesn't clearly delineate the two when speaking. (The economics portion starts about 16 minutes in.) I realized though that I didn't link to the best video to convey my point. Here is a more specific talk on inflation given by him and his wife to a room full of economists: https://www.youtube.com/watch?v=zwiHv7xVQ_c https://www.youtube.com/watch?v=zwiHv7xVQ_c Notably, the economists in the room point out that the inflation problem has already been tackled from a theoretical angle which does incorporate calculus. However, they say the resulting idea (the Divisia index) isn't practical for nation-level inflation measurements.

IfOnlyYouKnew 5y ago

This distrust of “politicians’ and public institutions (plus ‘the media”) is half of what’s eating away democracies all over the world. Actual corruption goes unpunished because “they are all corrupt” is easily turned from a cynical accusation into an excuse. Bitcoin is turning coal into flooding because people are afraid of the monetary crises of the 1920s (hyperinflation) and spooked by even the silliest conspiracy myths (“the FED is a private bank”). So, yes, measures of inflation aren’t perfect. But it’s “not perfect” in the most trivial sense: even some well-chosen single item (Big Mac?) gets you a measure of inflation that will be close enough most of the time. The actual basket improves it from maybe 90 % perfect to 98 %.

nradov 5y ago
Very few people are buying cryptocurrencies over fears of a USD monetary crisis. That's a fringe group. Instead must buyers are speculators trading on momentum and hoping to get rich quick before the bubble bursts. There are also a bunch of people using it to conduct illegal transactions (drugs, weapons, ransoms) or evade capital controls in repressive countries (China, Venezuela).
- reedjosh 5y ago
  > Very few people are buying cryptocurrencies over fears of a USD monetary crisis. You should join some of the Telegram groups. My experience has been generally the opposite. Checkout the channel for LN support group PlebNet or the PirateChain channel for example.
  - deleted 5y ago
    [deleted]