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Why do you think inflation is an “arbitrary number?” I can’t imagine what gave you that idea.

mehrdada 5y ago
> I can’t imagine what gave you that idea. I can't imagine it being that hard to imagine :) considering this is the second paragraph of wikipedia[1]: Prices will not all increase at the same rates. Attaching a representative value to a set of prices is an instance of the index number problem. The consumer price index is often used for this purpose; the employment cost index is used for wages in the United States. Differential movement between consumer prices and wages constitutes a change in the standard of living. [1]: https://en.wikipedia.org/wiki/Inflation https://en.wikipedia.org/wiki/Inflation
- softwarebeware 5y ago
  So…not an arbitrary number.
  - mehrdada 5y ago
    Precisely as arbitrary as how you choose to measure it, or more.
    - ethanbond 5y ago
      Considering that, say, 100% of tech employees are consumers and CPI measures cost increases for consumers, it may be “arbitrary” but still highly relevant.
      - mehrdada 5y ago
        For instance, if my employees are earning 500k+ and driving Teslas, I don't think the price of oil, lettuce and tomato, and even general rental market would be materially impactful like, say, the increase in Los Altos home prices. What really makes a difference is how much a competitor is willing to pay, their scale, their work environment, and how well they sell themselves.
        deleted 5y ago
        [deleted]
- syrrim 5y ago
  Any given measure of inflation is arbitrary, that doesn't mean the phenomenon itself is. Compare a concept like obesity and a common measure like BMI.
  - 314 5y ago
    The claim that the OP made was that inflation is an arbitrary number. The underlying phenomenon is not a number, more accurately it would be a vector containing all price deltas and any particular inflation measure is an arbitrary choice of how to project that vector onto a number. There is some validity to the claim. BMI is an interesting choice of comparison as many of the flaws in the measure are related to the arbitrary way that different body types produce different ranges.
    - deleted 5y ago
      [deleted]
ajkjk 5y ago
Inflation is a really flawed concept that is very hard to quantify in any non-subjective way. There is a real effect of prices going up but any measurement of it is subject to biases, because of the choice of which prices you look at.
refurb 5y ago
It's arbitrary to a company when it comes to wages. What matters is "can we hire/retain the people we want at compensation $X". If $X needs to increase because they can hire/retain the people they want, then $X needs to increase. The government publishing a single inflation numbers is kind of irrelevant to the equation. If they can keep hiring/retaining the people they want, in spite of inflation going up, then nothing has to change.

> I can’t imagine what gave you that idea. I can't imagine it being that hard to imagine :) considering this is the second paragraph of wikipedia[1]: Prices will not all increase at the same rates. Attaching a representative value to a set of prices is an instance of the index number problem. The consumer price index is often used for this purpose; the employment cost index is used for wages in the United States. Differential movement between consumer prices and wages constitutes a change in the standard of living. [1]: https://en.wikipedia.org/wiki/Inflation https://en.wikipedia.org/wiki/Inflation

softwarebeware 5y ago
So…not an arbitrary number.
- mehrdada 5y ago
  Precisely as arbitrary as how you choose to measure it, or more.
  - ethanbond 5y ago
    Considering that, say, 100% of tech employees are consumers and CPI measures cost increases for consumers, it may be “arbitrary” but still highly relevant.
    - mehrdada 5y ago
      For instance, if my employees are earning 500k+ and driving Teslas, I don't think the price of oil, lettuce and tomato, and even general rental market would be materially impactful like, say, the increase in Los Altos home prices. What really makes a difference is how much a competitor is willing to pay, their scale, their work environment, and how well they sell themselves.
      - deleted 5y ago
        [deleted]
syrrim 5y ago
Any given measure of inflation is arbitrary, that doesn't mean the phenomenon itself is. Compare a concept like obesity and a common measure like BMI.
- 314 5y ago
  The claim that the OP made was that inflation is an arbitrary number. The underlying phenomenon is not a number, more accurately it would be a vector containing all price deltas and any particular inflation measure is an arbitrary choice of how to project that vector onto a number. There is some validity to the claim. BMI is an interesting choice of comparison as many of the flaws in the measure are related to the arbitrary way that different body types produce different ranges.
  - deleted 5y ago
    [deleted]

ajkjk 5y ago

Inflation is a really flawed concept that is very hard to quantify in any non-subjective way. There is a real effect of prices going up but any measurement of it is subject to biases, because of the choice of which prices you look at.

refurb 5y ago

It's arbitrary to a company when it comes to wages. What matters is "can we hire/retain the people we want at compensation $X". If $X needs to increase because they can hire/retain the people they want, then $X needs to increase. The government publishing a single inflation numbers is kind of irrelevant to the equation. If they can keep hiring/retaining the people they want, in spite of inflation going up, then nothing has to change.