3 ms·

Can you be more specific? That's a long, nuanced reply that suggests several legit explanations that account for some of the trends, none of which look like dis

by SilasX 3y ago

Can you be more specific? That's a long, nuanced reply that suggests several legit explanations that account for some of the trends, none of which look like dismissing the whole thing as bad statistics, like you're claiming.[1] If anything, it agrees that "something happened" around 1971, and suggests multiple such things. [1] Edit: to me, "freshman bad statistics" means something like "the supposed trend is an artifact of how it was measured or transformed", but the link doesn't say anything like that -- this label is misleading at best.

ls612 3y ago
The main thing is that this is entirely because they choose CPI instead of PCE to measure inflation. Also it compares a median (wages) to a mean (productivity).
- SilasX 3y ago
  Yes, that's used to dismiss the significance of some of the asserted trends. But it also agrees that inflation really did go up: >>The change in the trade deficit (graphs 15 & 16) may be linked to the end of Bretton Woods indirectly. The end of the system created floating exchange rates. That allowed every nation to determine it's own monetary policy fully. When that happened many Central Banks behaved badly causing high inflation. The US stopped it's high inflation in the 1980s. And other real phenomena account for other trends c. 1971: >>Graph 3 is tricky. It shows how Real GDP per capita has moved away from real GDP per employee. The main reason for that is the introduction of women to the workplace. And it also agrees that some of the trends did happen, meriting investigation, but 1971 wasn't the inflection point: >>Take a look at graphs on inequality. Here I'm looking mostly at graphs 1, 6, 8, 9, 10. Notice that the inflection point isn't actually 1971. It's usually some time in the early 80s. Greater inequality between high income earners and everyone else started around then. It's a matter of debate why. A lot of economists believe it's because the modern developed economies rewards high skills more than they did in the past. Notice that the very first graph is misleading because it doesn't use total compensation. I have a hard time characterizing any of that as a "freshman statistics error".

by SilasX 3y ago

ls612 3y ago

The main thing is that this is entirely because they choose CPI instead of PCE to measure inflation. Also it compares a median (wages) to a mean (productivity).

SilasX 3y ago
Yes, that's used to dismiss the significance of some of the asserted trends. But it also agrees that inflation really did go up: >>The change in the trade deficit (graphs 15 & 16) may be linked to the end of Bretton Woods indirectly. The end of the system created floating exchange rates. That allowed every nation to determine it's own monetary policy fully. When that happened many Central Banks behaved badly causing high inflation. The US stopped it's high inflation in the 1980s. And other real phenomena account for other trends c. 1971: >>Graph 3 is tricky. It shows how Real GDP per capita has moved away from real GDP per employee. The main reason for that is the introduction of women to the workplace. And it also agrees that some of the trends did happen, meriting investigation, but 1971 wasn't the inflection point: >>Take a look at graphs on inequality. Here I'm looking mostly at graphs 1, 6, 8, 9, 10. Notice that the inflection point isn't actually 1971. It's usually some time in the early 80s. Greater inequality between high income earners and everyone else started around then. It's a matter of debate why. A lot of economists believe it's because the modern developed economies rewards high skills more than they did in the past. Notice that the very first graph is misleading because it doesn't use total compensation. I have a hard time characterizing any of that as a "freshman statistics error".