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It's nothing like that. People live in one place and only care about the weather at that place. Whereas consumers need products from all sectors of the economy
by gsk22 5y ago
It's nothing like that.
People live in one place and only care about the weather at that place. Whereas consumers need products from all sectors of the economy, so an aggregate inflation indicator makes sense.
Sure, it's not perfect, since every household spends their money differently, but everyone needs food, housing, energy, etc.
- helen___keller 5y agoI think it’s an apt metaphor. If you lived in a big city in the 2010s, you’ve probably read years worth of headlines about low inflation, all while experiencing a rapidly inflating cost of living. CPI is like climate news, not weather news, and should be understood as much.
- long_time_gone 5y agoIf GDP goes up 5%, but you only get a 3% raise does that make GDP a bad measure of the economy?
- vmception 5y agoAssumes GDP is a good measure without this hypothetical
- long_time_gone 5y agoI don't follow, can you please clarify? Edit: Reread and understand now... The point is that GDP is a measure of how much the economy in the US grows or contracts, just as CPI is a measure of how much prices in the US grow or contract. You shouldn't view GDP as a personal indicator of economic growth, just like CPI isn't an analysis of costs on your personal spending. Treating it as such feels like distorting the purpose of the measure to suit a narrative.
- vmception 5y agoIt has limitations in its ability to measure that, it can simultaneously be the best measure that we have, in the absence of a better one, doesn't mean its good or a helpful indication, and as we both agree it’s not a good indication of any individual persons experience
- long_time_gone 5y ago> It has limitations in its ability to measure that Nobody has denies this, so why is it a talking point? > as we both agree it’s not a good indication of any individual persons experience Which is why I use it for what it is instead of complaining about it not being something else. Any one individual is influenced by their own bias and experience, which creates an entirely different problem.
- vmception 5y ago> If GDP goes up 5%, but you only get a 3% raise does that make GDP a bad measure of the economy? let's stick with the basics. this was the whole conversation, a leading question that pretends to be a thought exercise that suggests in some other scenario that GDP is a good measure. no more, no less. I think we've gone over everything now.
- long_time_gone 5y agoI didn't see where you developed the bulletproof case that GDP was a bad measure. If you've proven that at some point, I'm happy to adjust my understanding. In lieu of that, I'll go with the economic experts who regularly study, use, and rely on GDP for real world analysis. > you're the only one that had to read it twice, we talked about it now, good talk. The lack of punctuation and choice of verb tense made it difficult to understand, no need for the condescending tone.
- stusmall 5y agoI like the analogy. Recent inflation hasn't hit my household as hard while its crippling for others. We work from home and rarely drive far when we do leave the house. We eat frugally and cook almost all our own meals. Finally we own our home and are locked in at our mortgage rate. Inflation has been hammering energy, food and housing costs. We've felt some of the food increases but the rest, not really. Meanwhile imagine a family that rents their home, commutes long distances to work and has growing kids. They are probably drowning. Comparing these cases feels a lot like averaging together the temperatures of Seattle and Houston.