4 ms·

At least the 20% inflation rate is underestimated

quxbar 3y ago
Economists like Paul Krugman are using a SURVEY of people asking them what they spent (for a NON FIXED basket of goods). Let's say that you used to eat 10 units of grains ($1 each) and 5 units of beef ($5 each), for total spending of $35. Let's now say that prices doubled (grains $2, beef $10). You can't afford $70, so you adjust your consumption patterns and replace 2 units of beef with 2 units of grain (cutting your beef consumption in half). We have now replicated the graph that Krugman so proudly showed off. "Food at home" prices are "only" up ~25%. Paraphrased and copy-pasted from here: https://twitter.com/MorlockP/status/1761782081351196814 https://twitter.com/MorlockP/status/1761782081351196814
- deleted 3y ago
  [deleted]
- gruez 3y ago
  > Economists like Paul Krugman are using a SURVEY of people asking them what they spent (for a NON FIXED basket of goods). 1. What survey are you talking about? It's certainly not mentioned in the OP, and I don't have a twitter account so I can't see the prior tweets. 2. It feels incredibly suspect to paint "economists" as using this particular methodology, when "inflation" is usually synonymous with "CPI", and that uses a fixed basket. In fact your linked tweet even admits this.
HumblyTossed 3y ago
I don’t know what you’re downvoted. I have a curated list of recipes I have been cycling through over the past 6 or 7 years. They’re things I like to cook and the family likes to eat. Two years ago we consistently spent about $110 per week on groceries. We are now consistently spending about $140 per week.
- gruez 3y ago
  Sure, you might think you're buying the same thing, but are you really? I can imagine endless reasons that would cause your grocery expenditures to silently increase without you being actively aware of it. For instance, maybe you switched to a more upscale brand and/or variety (eg. free range eggs), or your family's appetite increased (ie. puberty). Without detailed records it's hard to take such anecdotes at face value.
  - fuzzfactor 3y ago
    >Without detailed records it's hard to take such anecdotes at face value. Well it's pretty easy for millions of people to notice when it's the face value of their currency which has rapidly lost quite a bit of meaning. When you do the math, it's a little too late now, the currency has lost more face value than the "anecdotes". It doesn't even need to be at this scale, there are many situations where the data is so overwhelming that even non-recordkeeping below-average observers can build a more accurate picture than some twice-removed lesser mathematicians looking only at kilos of numerals. And that's when the economists have a truly neutral agenda. Also keep in mind, sometimes the most valuable data is never recorded but it's still data. Sometimes the most accurate data is recorded but it's so sensitive that it's not the least bit available, so might as well not have been recorded anyway. Edit: not my downvote, I understand where you're coming from.
    - gruez 3y ago
      >Well it's pretty easy for millions of people to notice when it's the face value of their currency which has rapidly lost quite a bit of meaning. For much of the 2000s and 2010s, people thought crime was on the way up, despite statistics that say otherwise. Clearly "millions of people" noticing a phenomena isn't a reliable indicator of it actually happening, which is why we have statistics agencies rather than going off vibes. >It doesn't even need to be at this scale, there are many situations where the data is so overwhelming that even non-recordkeeping below-average observers can build a more accurate picture than some twice-removed lesser mathematicians looking only at kilos of numerals. Examples of those "situations"?

Economists like Paul Krugman are using a SURVEY of people asking them what they spent (for a NON FIXED basket of goods). Let's say that you used to eat 10 units of grains ($1 each) and 5 units of beef ($5 each), for total spending of $35. Let's now say that prices doubled (grains $2, beef $10). You can't afford $70, so you adjust your consumption patterns and replace 2 units of beef with 2 units of grain (cutting your beef consumption in half). We have now replicated the graph that Krugman so proudly showed off. "Food at home" prices are "only" up ~25%. Paraphrased and copy-pasted from here: https://twitter.com/MorlockP/status/1761782081351196814 https://twitter.com/MorlockP/status/1761782081351196814

deleted 3y ago
[deleted]
gruez 3y ago
> Economists like Paul Krugman are using a SURVEY of people asking them what they spent (for a NON FIXED basket of goods). 1. What survey are you talking about? It's certainly not mentioned in the OP, and I don't have a twitter account so I can't see the prior tweets. 2. It feels incredibly suspect to paint "economists" as using this particular methodology, when "inflation" is usually synonymous with "CPI", and that uses a fixed basket. In fact your linked tweet even admits this.

HumblyTossed 3y ago

I don’t know what you’re downvoted. I have a curated list of recipes I have been cycling through over the past 6 or 7 years. They’re things I like to cook and the family likes to eat. Two years ago we consistently spent about $110 per week on groceries. We are now consistently spending about $140 per week.

gruez 3y ago
Sure, you might think you're buying the same thing, but are you really? I can imagine endless reasons that would cause your grocery expenditures to silently increase without you being actively aware of it. For instance, maybe you switched to a more upscale brand and/or variety (eg. free range eggs), or your family's appetite increased (ie. puberty). Without detailed records it's hard to take such anecdotes at face value.
- fuzzfactor 3y ago
  >Without detailed records it's hard to take such anecdotes at face value. Well it's pretty easy for millions of people to notice when it's the face value of their currency which has rapidly lost quite a bit of meaning. When you do the math, it's a little too late now, the currency has lost more face value than the "anecdotes". It doesn't even need to be at this scale, there are many situations where the data is so overwhelming that even non-recordkeeping below-average observers can build a more accurate picture than some twice-removed lesser mathematicians looking only at kilos of numerals. And that's when the economists have a truly neutral agenda. Also keep in mind, sometimes the most valuable data is never recorded but it's still data. Sometimes the most accurate data is recorded but it's so sensitive that it's not the least bit available, so might as well not have been recorded anyway. Edit: not my downvote, I understand where you're coming from.
  - gruez 3y ago
    >Well it's pretty easy for millions of people to notice when it's the face value of their currency which has rapidly lost quite a bit of meaning. For much of the 2000s and 2010s, people thought crime was on the way up, despite statistics that say otherwise. Clearly "millions of people" noticing a phenomena isn't a reliable indicator of it actually happening, which is why we have statistics agencies rather than going off vibes. >It doesn't even need to be at this scale, there are many situations where the data is so overwhelming that even non-recordkeeping below-average observers can build a more accurate picture than some twice-removed lesser mathematicians looking only at kilos of numerals. Examples of those "situations"?