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The big problem is people believing that there is any one such thing as inflation. There isn’t. The word inflation represents many, including wildly divergent,

The big problem is people believing that there is any one such thing as inflation. There isn’t. The word inflation represents many, including wildly divergent, ideas. And many of the very different things represented by inflation serve very different purposes, and that’s why they’re changed, because different measures of inflation help measure different concepts. Core inflation is just one of many different measures of inflation.

KptMarchewa 4y ago
Sure, everyone has it's own personal inflation, but I don't see why can't we look at aggregate data.
- yossarian1408 4y ago
  It's not even that. There are different drivers of inflation, it could be spurred by supply shocks, increased demand, greater supply of money, uncompetitive markets arising from government capture, etc., the economy is so complex that when you consider all these moving parts, a claim like "interest rates go down, inflation goes up" starts to sound incredibly reductive.
dopylitty 4y ago
This is a good point. The government really shouldn’t be producing a single number and saying that’s “the” inflation rate. It muddies the waters and makes it easy to think that the economy is some magic system where things just happen rather than the sum of choices by individual companies and consumers. If OPEC decided to stop producing oil altogether you bet there would be “inflation” caused by oil prices but that doesn’t mean the FED should be goaded into making changes to policy.
- nradov 4y ago
  The government doesn't produce a single number. The BLS produces multiple numbers and you can use whichever one fits your situation best.
  - binarybits 4y ago
    And then people frequently complain about these varieties—for example, that the BLS produces a "core" version that excludes food and energy even though there's also a version with that stuff included.
  - sokoloff 4y ago
    Same story with unemployment. Lots of people complain that U-3 doesn't capture some aspect of unemployment that they care about. Okay; that's why there are 5 other U-x measures...
- dragonwriter 4y ago
  > The government really shouldn’t be producing a single number and saying that’s “the” inflation rate. It doesn't, it produces many different Consumer Price Indices, plus a variety of industry-specific Producer Price Indices, all are measures of inflation.
- zajio1am 4y ago
  > If OPEC decided to stop producing oil altogether you bet there would be “inflation” caused by oil prices but that doesn’t mean the FED should be goaded into making changes to policy. Why should not? Inflation is just change of price level. Price level is just ratio of circulating money to real production. If OPEC decided to stop producing oil, that would create massive negative shock to real production, so FED should restrict circulating money to maintain that ratio.
dragonwriter 4y ago
> Core inflation is just one of many different measures of inflation. And not the main one produced by the BLS. Core CPI is the headline CPI with several items removed.

KptMarchewa 4y ago

Sure, everyone has it's own personal inflation, but I don't see why can't we look at aggregate data.

yossarian1408 4y ago
It's not even that. There are different drivers of inflation, it could be spurred by supply shocks, increased demand, greater supply of money, uncompetitive markets arising from government capture, etc., the economy is so complex that when you consider all these moving parts, a claim like "interest rates go down, inflation goes up" starts to sound incredibly reductive.

dopylitty 4y ago

This is a good point. The government really shouldn’t be producing a single number and saying that’s “the” inflation rate. It muddies the waters and makes it easy to think that the economy is some magic system where things just happen rather than the sum of choices by individual companies and consumers. If OPEC decided to stop producing oil altogether you bet there would be “inflation” caused by oil prices but that doesn’t mean the FED should be goaded into making changes to policy.

nradov 4y ago
The government doesn't produce a single number. The BLS produces multiple numbers and you can use whichever one fits your situation best.
- binarybits 4y ago
  And then people frequently complain about these varieties—for example, that the BLS produces a "core" version that excludes food and energy even though there's also a version with that stuff included.
- sokoloff 4y ago
  Same story with unemployment. Lots of people complain that U-3 doesn't capture some aspect of unemployment that they care about. Okay; that's why there are 5 other U-x measures...
dragonwriter 4y ago
> The government really shouldn’t be producing a single number and saying that’s “the” inflation rate. It doesn't, it produces many different Consumer Price Indices, plus a variety of industry-specific Producer Price Indices, all are measures of inflation.
zajio1am 4y ago
> If OPEC decided to stop producing oil altogether you bet there would be “inflation” caused by oil prices but that doesn’t mean the FED should be goaded into making changes to policy. Why should not? Inflation is just change of price level. Price level is just ratio of circulating money to real production. If OPEC decided to stop producing oil, that would create massive negative shock to real production, so FED should restrict circulating money to maintain that ratio.

dragonwriter 4y ago

> Core inflation is just one of many different measures of inflation. And not the main one produced by the BLS. Core CPI is the headline CPI with several items removed.