3 ms·

They update CPI regularly to reflect what people are currently buying. The economists and professionals who work in this industry aren't idiots. The CPI index

by boc 5y ago

They update CPI regularly to reflect what people are currently buying. The economists and professionals who work in this industry aren't idiots. The CPI index has been running continuously for decades and yet you've decided based on one uninformed HN comment that we need to scrap it and rebuild it with different measurements? Peak hubris.

user3939382 5y ago
> one uninformed HN comment I spent ten years building and maintaining one of the most important economics time-series databases in the world (tracking the US chain store sales index), if that's a credential. I would say that criticism of the CPI isn't something I invented: https://www.investopedia.com/articles/07/consumerpriceindex.asp https://www.investopedia.com/articles/07/consumerpriceindex.... https://www.forbes.com/sites/perianneboring/2014/02/03/if-you-want-to-know-the-real-rate-of-inflation-dont-bother-with-the-cpi/?sh=38d6d023200b https://www.forbes.com/sites/perianneboring/2014/02/03/if-yo... You can search around for plenty of criticism of the CPI if you're interested. The former is reviewed by a guy with a doctorate in economics from Harvard. Is he "uninformed"?
- mcguire 5y ago
  Are he, and you, arguing that the CPI report is useless?
- boc 5y ago
  This is all fair and there are hundreds of economists who will admit that CPI has plenty of shortcomings - I don't think anyone would say that it's perfect or even hugely accurate. However the value of CPI comes from the fact that it's the accepted "compromise" for weighting and measuring inflation across the largest economy in the world. If you believe that CPI isn't accurate and your methods more accurately represent real-world inflation conditions, there's a ton of money to be made betting on the TIPS spread. https://www.thebalance.com/10-year-treasuries-historical-chart-416897 https://www.thebalance.com/10-year-treasuries-historical-cha... https://fred.stlouisfed.org/series/T10YIE https://fred.stlouisfed.org/series/T10YIE Right now it appears the market is actually reducing long-term expectations for inflation.
wonderwonder 5y ago
Its the way we've always done it so its the way we will always do it. Dustbin of history is filled with people with the same take.

by boc 5y ago

user3939382 5y ago

> one uninformed HN comment I spent ten years building and maintaining one of the most important economics time-series databases in the world (tracking the US chain store sales index), if that's a credential. I would say that criticism of the CPI isn't something I invented: https://www.investopedia.com/articles/07/consumerpriceindex.asp https://www.investopedia.com/articles/07/consumerpriceindex.... https://www.forbes.com/sites/perianneboring/2014/02/03/if-you-want-to-know-the-real-rate-of-inflation-dont-bother-with-the-cpi/?sh=38d6d023200b https://www.forbes.com/sites/perianneboring/2014/02/03/if-yo... You can search around for plenty of criticism of the CPI if you're interested. The former is reviewed by a guy with a doctorate in economics from Harvard. Is he "uninformed"?

mcguire 5y ago
Are he, and you, arguing that the CPI report is useless?
boc 5y ago
This is all fair and there are hundreds of economists who will admit that CPI has plenty of shortcomings - I don't think anyone would say that it's perfect or even hugely accurate. However the value of CPI comes from the fact that it's the accepted "compromise" for weighting and measuring inflation across the largest economy in the world. If you believe that CPI isn't accurate and your methods more accurately represent real-world inflation conditions, there's a ton of money to be made betting on the TIPS spread. https://www.thebalance.com/10-year-treasuries-historical-chart-416897 https://www.thebalance.com/10-year-treasuries-historical-cha... https://fred.stlouisfed.org/series/T10YIE https://fred.stlouisfed.org/series/T10YIE Right now it appears the market is actually reducing long-term expectations for inflation.

wonderwonder 5y ago

Its the way we've always done it so its the way we will always do it. Dustbin of history is filled with people with the same take.