3 ms·

there's no getting away with anything. The inflation stat "everyone" uses is preferred by economists because it is not as noisy, i.e. it has better temporal aut

by fdr 4y ago

there's no getting away with anything. The inflation stat "everyone" uses is preferred by economists because it is not as noisy, i.e. it has better temporal auto-correlation. However, there are all-inclusive metrics as well, and in fact those are used to compute the I-bond yield. https://www.bls.gov/news.release/cpi.t01.htm https://www.bls.gov/news.release/cpi.t01.htm

pclmulqdq 4y ago
A more cynical take on this is that the remaining goods in the basket often have "adjustments" that can be made - for example, most technology gets discounted because the new version is faster (in top-line performance) than the old version. That adjustment process allows them to create a lower-noise metric, with the side effect of also creating an inflation narrative that is convenient (unless things are well and truly out of control, like they are now).
- fdr 4y ago
  You could say that, but then you have to explain why all my commodity investments seem so terrible. This is mostly a joke, as I don't trade commodities; however, if BLS is juking the stats year over year with some agenda or other, basic inputs should have a steeper nominal trend line than they do, noisy as it is.
- SilasX 4y ago
  Exactly. Like the infamous remark that inflation is being canceled out by faster iPads: https://www.reuters.com/article/us-usa-fed-dudley-ipad-idUSTRE72A4AC20110311 https://www.reuters.com/article/us-usa-fed-dudley-ipad-idUST...
8note 4y ago
It still has political side benefits, which is likely why economists who prefer it get funding to continue their research etc. The "getting away with it" is that in some forms, the wealthy can say it's bad that poor people get money because "it makes inflation" but when rich people get money, it's ok, because the resulting cost increases don't show up on the CPI

3 ms·

there's no getting away with anything. The inflation stat "everyone" uses is preferred by economists because it is not as noisy, i.e. it has better temporal aut

by fdr 4y ago

pclmulqdq 4y ago
A more cynical take on this is that the remaining goods in the basket often have "adjustments" that can be made - for example, most technology gets discounted because the new version is faster (in top-line performance) than the old version. That adjustment process allows them to create a lower-noise metric, with the side effect of also creating an inflation narrative that is convenient (unless things are well and truly out of control, like they are now).
- fdr 4y ago
  You could say that, but then you have to explain why all my commodity investments seem so terrible. This is mostly a joke, as I don't trade commodities; however, if BLS is juking the stats year over year with some agenda or other, basic inputs should have a steeper nominal trend line than they do, noisy as it is.
- SilasX 4y ago
  Exactly. Like the infamous remark that inflation is being canceled out by faster iPads: https://www.reuters.com/article/us-usa-fed-dudley-ipad-idUSTRE72A4AC20110311 https://www.reuters.com/article/us-usa-fed-dudley-ipad-idUST...
8note 4y ago
It still has political side benefits, which is likely why economists who prefer it get funding to continue their research etc. The "getting away with it" is that in some forms, the wealthy can say it's bad that poor people get money because "it makes inflation" but when rich people get money, it's ok, because the resulting cost increases don't show up on the CPI