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>they question if CPI is the best metric for measuring inflation, not whether or not durable assets should be considered consumables Right. Inflation is suppos
by Rury 4y ago
>they question if CPI is the best metric for measuring inflation, not whether or not durable assets should be considered consumables
Right. Inflation is supposed to be a measure of erosion in purchasing power. Why should we leave out durable assets (which are purchasable things) from that measure and only consider consumable things? I get that's not CPI's intended purpose, but then why do people use it for defacto inflation?
- sokoloff 4y agoAn oil well, a farm, an ounce of gold, and a share of $AAPL are also durable assets and purchasable things. Should they be included in CPI as well?
- randomdata 4y agoCertainly if something is purchased infrequently or by few people it will not provide enough data to learn how about how purchasing power has eroded. Houses are a poor fit no matter how you slice it as the typical person will buy very few in their lifetime, with often decades between purchases. We like to track inflation on a monthly basis. That requires things that most people purchase on much more regular schedule to see how their behaviour is changing on a regular schedule.