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> Inflation can be thought of as a high dimensional vector with dimensions equal to the number of objects you buy with money. No, that's just the changes in in
by lottin 4y ago
> Inflation can be thought of as a high dimensional vector with dimensions equal to the number of objects you buy with money.
No, that's just the changes in individual prices.
Inflation is the change in the price level, and it has always been that. Nobody has changed subreptitiously the definition of inflation in order to rip you off.
- FabHK 4y agoInflation the scalar product (inner product) of the vector of price changes and the vector of basket quantities, with the former being uniform for the entire market, but the latter being different for different consumers, which is why an "average" basket is chosen for the official inflation number.
- lottin 4y agoThis is incorrect. You're confusing an estimator (the CPI) with the actual quantity being estimated (inflation). For example, the GDP deflator, which is another estimator of inflation, is not a weighted average.