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Shadowstats.com has been tracking inflation with old methods for a long time
by hammock 4y ago
Shadowstats.com has been tracking inflation with old methods for a long time
- staticman2 4y agoNo it hasn't. The numbers on that site are fiction.
- jjoonathan 4y agoThey look like adding a constant to the official numbers, lol. There is plenty of genuine spirited debate to be had over the basket of goods. There is room for using one indicator over another for any given application. Even against that backdrop shadowstats is clearly just a grift.
- imtringued 4y agoAdding a constant to exponential growth is absurd. Each 1% increase is more potent than the next.
- mywittyname 4y ago> There is room for using one indicator over another for any given application. Absolutely, but this kind of debate needs to be done in good faith and with the understanding that whatever new basket of goods one comes up with is unlikely to be applicable to any more people in the economy. The basket of goods is like a a medium shirt. It's not going to fit anyone very well, and it won't fit most people at all. Swapping the shirt out for a large isn't going to improve the fit for people as a whole, it will just change the people who fit in it. The curse of dimensionality rears its head when talking about "averages" over a number of dimensions. There's not really a good methodology to distill such a complex topic down to a single figure.
- binarybits 4y agoOP author here. I wrote a shadowstats debunker back in November: https://fullstackeconomics.com/no-the-real-inflation-rate-isnt-14-percent/ https://fullstackeconomics.com/no-the-real-inflation-rate-is... tldr: they don't actually reconstruct the old methodology. They add a fudge factor based on how much they think the new methodology increases the inflation rate. And that estimate is based on a basic math error.
- throw0101a 4y agoFurther, their newsletter has been at the same annual price for >10 years. If everything costs more they must be running a charity, or finding "efficiencies" every year, in order to keep the price the same.
- CrazyStat 4y agoThanks, this will be useful next time someone points to shadow stats.
- hammock 4y agoThanks for writing that up. It was always pretty clear the Shadowstats methodology was the simple application of some constant factor, and Shadowstats was more an instrument to talk about how the government measures inflation (and changes its own methodology) than anything else.