4 ms·
Reminder that: 1) Price is the baseline measure. 2) Inflation is the first derivative. 3) Rate of change of inflation (reflation, disinflation) is the second
by netbioserror 2y ago
Reminder that:
1) Price is the baseline measure.
2) Inflation is the first derivative.
3) Rate of change of inflation (reflation, disinflation) is the second derivative.
4) Rate of change of the rate of change of inflation (change in reflation/disinflation) is the third derivative.
Just to keep the talking head smoke blowing to the right receptacles.
- beerandt 2y agoThe example I use for those who didn't take calculus, which usually prevents glazed-stare onset: 1) Position 2) Velocity 3) Acceleration 4) Jerk
- AnimalMuppet 2y agoExcept that non-calculus, non-physics people don't know what jerk is. If you try to explain, they'll decide that it's you ;-)
- beerandt 2y agoYeah, but that's actually what draws renewed interest about half the time, as a TIL. And if neither that or the overall comparison works, you probably never had a chance anyway. ETA- And 9/10 when I use it, it's in the context of engineering, explaining pavement damage and impact loads or similar. It's a great early tell for which version of the explanation you're going to get.
- bryanlarsen 2y agoJerk is accelerating acceleration. Acceleration is the feeling you get when you're pushed back in your seat in a car or amusement park ride. Jerk is what happens when the depth into your seat is increasing (or decreasing).
- RhysU 2y agoSnap, Crackle, and Pop come next. https://en.wikipedia.org/wiki/Fourth,_fifth,_and_sixth_derivatives_of_position https://en.wikipedia.org/wiki/Fourth,_fifth,_and_sixth_deriv...
- mjhay 2y agoAs a corollary to 2), a reduction in inflation does not return prices back to previous levels. That's a misconception I see all the time. Negative inflation, or deflation, can reduce prices of course, but you really, really don't want deflation.
- netbioserror 2y agoWhy?
- School-Cotton 2y agoI'd guess because it makes hording cash a good investment and thus disincentivizes economic activity. Edit: corrected misspelling (cache -> cash)
- netbioserror 2y agoIf saving is a better investment than stocks or business, isn't that a healthy way to counter speculation, risk, malinvestment, and scammy exuberance cycles? Seems like a direct answer to the whole-market financialization that people complain inflation incentivizes.
- mjhay 2y agoIt incentives holding cash and letting it sit, not putting it into productive investments. Deflation was a big part of Japan's economic woes for years. It's hard to climb out of.
- School-Cotton 2y agoWell it doesn't only counter the bad kinds of economic activity, it also counters the good kinds. If a mom-and-pop store with low margins can make more profit by hoarding cash than by expanding their business and employing more people, it can't be good.
- 2y ago