6 ms·

The measure exists, whether or not there is a "shock to pass". "inflation is a rather noisy signal to respond to" The measure exists, whether or not it is "no

by jerf 5y ago

The measure exists, whether or not there is a "shock to pass". "inflation is a rather noisy signal to respond to" The measure exists, whether or not it is "noisy". Besides, we're past "transient uptick" here anyhow. That was an argument for three months ago. "Can this COVID-related logistics crunch be long-lasting enough to warrant a response from a central bank?" Inflation exists and can be measured. Whether a central bank wants to respond to it is always a separate question. COVID has not suddenly made it a separate question. Don't let people get away with this. You must not let them conflate in your head a measure with its cause. You must keep them separate or you're going to get snowed. "Well, yes, the web page takes 28 seconds to load, but it's because we do several hundred database queries that are really slow, we do it in a slow language, we pull in dozens of unnecessary third party libraries and also our server is underprovisioned." How much faster does the web page load because you've explained why the web page takes a long time to load? Moreover, let me explicitly state I'm not trying to ascribe any particular cause to the inflation measure myself. I'm just advocating for, don't let them somehow "explain away" the measure with the very cause of the measure. It's a very cute trick, but don't let them do it. It isn't being done for your benefit.

hervature 5y ago
I think you're missing the point even though you laid out all the necessary facts. Before reporting a big inflation number and potentially causing panic or altering behavior, they believe (or hope) that the next months will have lower or even deflation so that they can average out to something more normal. Brought to an extreme, imagine waiting 50 years to be able to say "aha, see, inflation only averaged 3% from 2021-2071" even though there was a big spike in the first year.
beambot 5y ago
Let's use another example to explain why your thinking is incomplete: temperature versus global warming. Just because it's a bit chilly today, it does not mean that global warming isn't real. The time constants of the underlying effect matter, even if you have high variance in shorter time scales.
- jerf 5y ago
  So, your thesis is that if it's cold today, the weather channels shouldn't report it, because telling people it's cold today will lead to people coming to wrong conclusions about global warming? The measure exists. Hiding it does not make the measure stop existing. The fact that it's cold today "because of a polar vortex" does not make my house any warmer. This is really basic stuff. You must be able to keep these things separate if you want to be able to think rationally. You must be able to accept that there is data that does not seem to agree with the final conclusion. You are all asserting that it is good and proper to let the conclusions mix back into the source data, and advocating that it is good to do so. This is not rational, and it is not good and proper. Any conclusion you've drawn via such a methodology ought to be re-examined. Seeing such vigorous, spirited, and numerous defenses of systematically muddied thinking on HN is a bit odd.
  - beambot 5y ago
    I certainly wasn't suggesting that we should stop measuring instantaneous CPI / inflation. We should -- it's the only way that the bigger macro trend becomes visible over time. My entire comment was: Don't miss the forest for the trees. It's the same as driving a car: Instantaneous velocity matters, but so do averages. The economy operates at timescales that are both micro (e.g. high-frequency trading) and macro (e.g. 5-year & 10-year plans). Inflation has an instantaneous measurement aspect (i.e. CPI) and a longer-trend macro component. Only time will tell if today's inflation is transitory (as the Fed would like us to believe) or part of a bigger shift. But it's impossible to suss out the bigger underlying trend right now, given that we're in the middle of a giant, covid-induced supply-chain bullwhip: https://en.wikipedia.org/wiki/Bullwhip_effect https://en.wikipedia.org/wiki/Bullwhip_effect
gjulianm 5y ago
> "Well, yes, the web page takes 28 seconds to load, but it's because we do several hundred database queries that are really slow, we do it in a slow language, we pull in dozens of unnecessary third party libraries and also our server is underprovisioned." How much faster does the web page load because you've explained why the web page takes a long time to load? As I understand this issue, your metaphor would be different. Something like "Yes, the web page takes 28 seconds to load, but right now our provider is having allocation issues and we aren't getting the resources we have allocated. Let's wait to see if that gets fixed soon before spending time on researching and over-optimizing things, we might end up losing more than we gain if the latency is indeed due to the provider".
deleted 5y ago
[deleted]
beefield 5y ago
> Besides, we're past "transient uptick" here anyhow. That was an argument for three months ago. Why? I am no real economist, but my common sense based armchair economics would think that post-covid-mess inflation peak would take at least a year or two, maybe even more, not a couple of months? There are, after all, real supply (chain) issues to be sorted, which takes time, and which cause increasing prices.
- Hokusai 5y ago
  "What’s also apparent from her vantage point is that supply uncertainties, disruptions, and inflationary forces are here for the foreseeable future, perhaps into 2023. But how things play out this month, one of two peak seasons each year for goods, will be crucial in determining how long these shortages last and which companies are able to adapt." https://www.bloomberg.com/news/features/2021-09-16/supply-chain-issues-shortages-and-delayed-shipping-through-2023 https://www.bloomberg.com/news/features/2021-09-16/supply-ch...
- jerf 5y ago
  "A year or two" is not a "transient uptick". It's real inflation at that point.

by jerf 5y ago

hervature 5y ago

I think you're missing the point even though you laid out all the necessary facts. Before reporting a big inflation number and potentially causing panic or altering behavior, they believe (or hope) that the next months will have lower or even deflation so that they can average out to something more normal. Brought to an extreme, imagine waiting 50 years to be able to say "aha, see, inflation only averaged 3% from 2021-2071" even though there was a big spike in the first year.

beambot 5y ago

Let's use another example to explain why your thinking is incomplete: temperature versus global warming. Just because it's a bit chilly today, it does not mean that global warming isn't real. The time constants of the underlying effect matter, even if you have high variance in shorter time scales.

jerf 5y ago
So, your thesis is that if it's cold today, the weather channels shouldn't report it, because telling people it's cold today will lead to people coming to wrong conclusions about global warming? The measure exists. Hiding it does not make the measure stop existing. The fact that it's cold today "because of a polar vortex" does not make my house any warmer. This is really basic stuff. You must be able to keep these things separate if you want to be able to think rationally. You must be able to accept that there is data that does not seem to agree with the final conclusion. You are all asserting that it is good and proper to let the conclusions mix back into the source data, and advocating that it is good to do so. This is not rational, and it is not good and proper. Any conclusion you've drawn via such a methodology ought to be re-examined. Seeing such vigorous, spirited, and numerous defenses of systematically muddied thinking on HN is a bit odd.
- beambot 5y ago
  I certainly wasn't suggesting that we should stop measuring instantaneous CPI / inflation. We should -- it's the only way that the bigger macro trend becomes visible over time. My entire comment was: Don't miss the forest for the trees. It's the same as driving a car: Instantaneous velocity matters, but so do averages. The economy operates at timescales that are both micro (e.g. high-frequency trading) and macro (e.g. 5-year & 10-year plans). Inflation has an instantaneous measurement aspect (i.e. CPI) and a longer-trend macro component. Only time will tell if today's inflation is transitory (as the Fed would like us to believe) or part of a bigger shift. But it's impossible to suss out the bigger underlying trend right now, given that we're in the middle of a giant, covid-induced supply-chain bullwhip: https://en.wikipedia.org/wiki/Bullwhip_effect https://en.wikipedia.org/wiki/Bullwhip_effect

gjulianm 5y ago

> "Well, yes, the web page takes 28 seconds to load, but it's because we do several hundred database queries that are really slow, we do it in a slow language, we pull in dozens of unnecessary third party libraries and also our server is underprovisioned." How much faster does the web page load because you've explained why the web page takes a long time to load? As I understand this issue, your metaphor would be different. Something like "Yes, the web page takes 28 seconds to load, but right now our provider is having allocation issues and we aren't getting the resources we have allocated. Let's wait to see if that gets fixed soon before spending time on researching and over-optimizing things, we might end up losing more than we gain if the latency is indeed due to the provider".

deleted 5y ago

[deleted]

beefield 5y ago

> Besides, we're past "transient uptick" here anyhow. That was an argument for three months ago. Why? I am no real economist, but my common sense based armchair economics would think that post-covid-mess inflation peak would take at least a year or two, maybe even more, not a couple of months? There are, after all, real supply (chain) issues to be sorted, which takes time, and which cause increasing prices.

Hokusai 5y ago
"What’s also apparent from her vantage point is that supply uncertainties, disruptions, and inflationary forces are here for the foreseeable future, perhaps into 2023. But how things play out this month, one of two peak seasons each year for goods, will be crucial in determining how long these shortages last and which companies are able to adapt." https://www.bloomberg.com/news/features/2021-09-16/supply-chain-issues-shortages-and-delayed-shipping-through-2023 https://www.bloomberg.com/news/features/2021-09-16/supply-ch...
jerf 5y ago
"A year or two" is not a "transient uptick". It's real inflation at that point.