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Thank you for this. The ill-defined nature of inflation is an extremely important and often overlooked fact. Another interesting problem with the concept of i
by geysersam 4y ago
Thank you for this.
The ill-defined nature of inflation is an extremely important and often overlooked fact.
Another interesting problem with the concept of inflation:
Thirty years ago, what would've been the "consumer price" of a modern smartphone? Millions, easily.
Same goes for many other technologies that have fallen in price rapidly. (Big screen TVs, speakers, computers, anything with a screen, a CPU or a wireless communication chip really.)
Is this deflation?
- naasking 4y ago> Thirty years ago, what would've been the "consumer price" of a modern smartphone? Millions, easily. Sure, but how many of them were there? Zero. Volume has to be accounted for.
- geysersam 4y agoBut how are you going to compare prices between two periods if you don't include the same items in the "market basket"?
- naasking 4y agoBy comparing median total living costs to reflect what's typical. A cell phone and computer are indispensable today, a land line not so much, for instance.
- geysersam 4y agoWith that definition, won't you conflate inflation with changes to income distribution and economic growth? Having a 2% inflation target would in practice mean having a target for median living cost increase.