4 ms·

Common sense is what you call something when you can't explain yourself.

marcosdumay 3y ago
In other areas, common sense tends to not be absolute bullshit as often as in economics. Usually just the fact that something never works like the common sense implies is enough to remove a fact from the popular culture.
- SAI_Peregrinus 3y ago
  Inflation is the rate of change of prices. As long as it's positive, prices will keep increasing. Inflation has gone down, but has not become negative (has not turned into "deflation").
- stevenAthompson 3y ago
  Can you be more specific? Which part of economics do you believe should be removed as a fact from popular culture?
  - bratwurst3000 3y ago
    „The market regulates itself“ is certainly one. „Everything gets cheaper“ is another one.
  - marcosdumay 3y ago
    Hum... You can look abou 3 comments upthread. That's a widely popular fact. And yet there doesn't seem to be any correlation between growth and any positive amount of inflation. (There is a lot of correlation for negative inflation.) Even the idea that "inflation" is something simple to define and measure is wrong.
    - stevenAthompson 3y ago
      I am not an economist, I do not even play one on TV. So forgive me if I sound naive. That said, it seems intuitive that inflation and growth would be linked. Inflation means that there is more demand than supply, right? In response to that increased demand supply (and the number of jobs) are increased by profit seekers, which creates growth. What am I missing?
      - marcosdumay 3y ago
        You are missing complexity. That model is naive, and the world doesn't really work that way. But then, AFAIK nobody has a good model that actually explains what we see. Anyway: > Inflation means that there is more demand than supply, right? Even in principle, balancing supply and demand is a task of price ratios. And most definitions of inflation make it something that doesn't reflect price ratios at all. Instead, it's usually about absolute prices.
        stevenAthompson 3y ago
        Thanks for that explanation. I will try to learn more about it.
      - bratwurst3000 3y ago
        I am no economist either. As I understand inflation is the reduction in purchasing power towards a basket of household goods and services. So it’s not only ask and demand but many other factors like energy price rising and all the things that get into the cost of a product or service. Inflation in the sense of growth is the more money it needs to have a transit of the value of goods the more goods are produced of value and sold so the net revenue for credits should be positiv and that over time is growth. Or otherwise said we have more stuff at the end of the day … jehaa Edit:// the credit by the bank is the money supply in that case. In my opinion that model sucks But please don’t believe me I am no expert https://en.m.wikipedia.org/wiki/Consumer_price_index https://en.m.wikipedia.org/wiki/Consumer_price_index

In other areas, common sense tends to not be absolute bullshit as often as in economics. Usually just the fact that something never works like the common sense implies is enough to remove a fact from the popular culture.

SAI_Peregrinus 3y ago
Inflation is the rate of change of prices. As long as it's positive, prices will keep increasing. Inflation has gone down, but has not become negative (has not turned into "deflation").
stevenAthompson 3y ago
Can you be more specific? Which part of economics do you believe should be removed as a fact from popular culture?
- bratwurst3000 3y ago
  „The market regulates itself“ is certainly one. „Everything gets cheaper“ is another one.
- marcosdumay 3y ago
  Hum... You can look abou 3 comments upthread. That's a widely popular fact. And yet there doesn't seem to be any correlation between growth and any positive amount of inflation. (There is a lot of correlation for negative inflation.) Even the idea that "inflation" is something simple to define and measure is wrong.
  - stevenAthompson 3y ago
    I am not an economist, I do not even play one on TV. So forgive me if I sound naive. That said, it seems intuitive that inflation and growth would be linked. Inflation means that there is more demand than supply, right? In response to that increased demand supply (and the number of jobs) are increased by profit seekers, which creates growth. What am I missing?
    - marcosdumay 3y ago
      You are missing complexity. That model is naive, and the world doesn't really work that way. But then, AFAIK nobody has a good model that actually explains what we see. Anyway: > Inflation means that there is more demand than supply, right? Even in principle, balancing supply and demand is a task of price ratios. And most definitions of inflation make it something that doesn't reflect price ratios at all. Instead, it's usually about absolute prices.
      - stevenAthompson 3y ago
        Thanks for that explanation. I will try to learn more about it.
    - bratwurst3000 3y ago
      I am no economist either. As I understand inflation is the reduction in purchasing power towards a basket of household goods and services. So it’s not only ask and demand but many other factors like energy price rising and all the things that get into the cost of a product or service. Inflation in the sense of growth is the more money it needs to have a transit of the value of goods the more goods are produced of value and sold so the net revenue for credits should be positiv and that over time is growth. Or otherwise said we have more stuff at the end of the day … jehaa Edit:// the credit by the bank is the money supply in that case. In my opinion that model sucks But please don’t believe me I am no expert https://en.m.wikipedia.org/wiki/Consumer_price_index https://en.m.wikipedia.org/wiki/Consumer_price_index