4 ms·

It’s not just rescaling, overall production is not constant and is dependent on interest rates/economic activity/etc. eg after COVID there was all kinds of weir

by ivalm 4y ago

It’s not just rescaling, overall production is not constant and is dependent on interest rates/economic activity/etc. eg after COVID there was all kinds of weird price dynamics due to supply/demand mismatches.

ajross 4y ago
Again, that's wrong. Inflation is by definition the scale-dependent part of price changes. You're right that prices can go up because of a reduction in supply too, but that's measures as part of numbers like GDP; which, importantly, are routinely expressed using inflation-adjusted numbers to avoid precisely the conflation you and the grandparent are making. So, sure, if you want to rephrase and lament that people are unable to afford stuff because of the recent drop in supply (or increase in demand) for the products they want, that would be logically consistent. But it would be factually wrong, as in fact in aggregate[1] world GDP is doing pretty well right now. [1] As above, specific products and markets are always moving. Something is always more expensive than it should be and there's always a glut in something else. People were complaining about eggs last week, IIRC.
- marcosdumay 4y ago
  Well, monetary changes maintain the mean purchase power. But people being able to buy necessities is more about median purchase power, or really the details of its distribution. The mean purchase power has a very small impact on society.
  - ajross 4y ago
    And I say a third time: if you want to have a discussion about unfair distribution of monetary effects on specific populations, you need to have that discussion and not just shout "inflation!". Because while your point is true, it's specious. Changes are always happening (c.f. eggs, mentioned upthread). The question isn't whether things are changing, it's about what is changing and what to do about it.
    - marcosdumay 4y ago
      Still "elevated inflation disrupts the purchase power of most of the population" is a perfectly real phenomenon. It's not an "specific population", unless you think "almost everyone" is "specific". And yes, the disruption tends to pass after the inflation goes away. But none of that makes the argument specious.
      - ajross 4y ago
        "Elevated inflation reduces the impact of credit card and mortgage debt" is an equally real phenomenon, though. Without numbers your argument is specious. There are winners and losers. Whose losing and by how much? I'll give you a few losers: retirees on fixed incomes, and investment employees working on commission. And a few winners: homeowners, and young professionals with significant credit debt. There are lots of others. Feel free to advocate for the policies you think are appropriate. Just please stop with the "Inflation!" nonsense as a shorthand argument.
        marcosdumay 4y ago
        > "Elevated inflation reduces the impact of credit card and mortgage debt" is an equally real phenomenon, though. Yes, and it has a different temporal behavior from the impact on the purchase power. The same person can be affected by both. As a rule, inflation infuriates people because almost everyone jut wakes up some day and discover they are much poorer than they used to be. You can't dismiss this by pointing that their net-worth improved. (But yes, the net-worth of a lot of people improves.)
        ajross 4y ago
        > inflation infuriates people I'll certainly grant this, not the least because they get terrible information about it from media and online sources. > almost everyone jut wakes up some day and discover they are much poorer than they used to be Like this. This is not true. This is a lie. You need to stop saying this. People are "much poorer" post-inflation only in the sense that they were "much richer" post-pandemic, due to the huge savings boom. If you aren't willing to look at the latter, then you're not doing the analysis correctly. At most, "some" people are "much poorer" due to asymmetric effects. But you're just wrong here if you try to extend that to "almost everyone". Please stop.

by ivalm 4y ago

ajross 4y ago

Again, that's wrong. Inflation is by definition the scale-dependent part of price changes. You're right that prices can go up because of a reduction in supply too, but that's measures as part of numbers like GDP; which, importantly, are routinely expressed using inflation-adjusted numbers to avoid precisely the conflation you and the grandparent are making. So, sure, if you want to rephrase and lament that people are unable to afford stuff because of the recent drop in supply (or increase in demand) for the products they want, that would be logically consistent. But it would be factually wrong, as in fact in aggregate[1] world GDP is doing pretty well right now. [1] As above, specific products and markets are always moving. Something is always more expensive than it should be and there's always a glut in something else. People were complaining about eggs last week, IIRC.

marcosdumay 4y ago
Well, monetary changes maintain the mean purchase power. But people being able to buy necessities is more about median purchase power, or really the details of its distribution. The mean purchase power has a very small impact on society.
- ajross 4y ago
  And I say a third time: if you want to have a discussion about unfair distribution of monetary effects on specific populations, you need to have that discussion and not just shout "inflation!". Because while your point is true, it's specious. Changes are always happening (c.f. eggs, mentioned upthread). The question isn't whether things are changing, it's about what is changing and what to do about it.
  - marcosdumay 4y ago
    Still "elevated inflation disrupts the purchase power of most of the population" is a perfectly real phenomenon. It's not an "specific population", unless you think "almost everyone" is "specific". And yes, the disruption tends to pass after the inflation goes away. But none of that makes the argument specious.
    - ajross 4y ago
      "Elevated inflation reduces the impact of credit card and mortgage debt" is an equally real phenomenon, though. Without numbers your argument is specious. There are winners and losers. Whose losing and by how much? I'll give you a few losers: retirees on fixed incomes, and investment employees working on commission. And a few winners: homeowners, and young professionals with significant credit debt. There are lots of others. Feel free to advocate for the policies you think are appropriate. Just please stop with the "Inflation!" nonsense as a shorthand argument.
      - marcosdumay 4y ago
        > "Elevated inflation reduces the impact of credit card and mortgage debt" is an equally real phenomenon, though. Yes, and it has a different temporal behavior from the impact on the purchase power. The same person can be affected by both. As a rule, inflation infuriates people because almost everyone jut wakes up some day and discover they are much poorer than they used to be. You can't dismiss this by pointing that their net-worth improved. (But yes, the net-worth of a lot of people improves.)
        ajross 4y ago
        > inflation infuriates people I'll certainly grant this, not the least because they get terrible information about it from media and online sources. > almost everyone jut wakes up some day and discover they are much poorer than they used to be Like this. This is not true. This is a lie. You need to stop saying this. People are "much poorer" post-inflation only in the sense that they were "much richer" post-pandemic, due to the huge savings boom. If you aren't willing to look at the latter, then you're not doing the analysis correctly. At most, "some" people are "much poorer" due to asymmetric effects. But you're just wrong here if you try to extend that to "almost everyone". Please stop.