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> You either do or you don't include real estate in inflation and if you don't then you can't suddenly add them in later on I didn't, I compared average home p

• jacquesm 1y ago
  That's a result of an increase in demand and a very strong shortage of supply, which is related to inflation but not quite equivalent. Houses, as a store of value have substantial differences compared to the rest of the items that go into the inflation calculation, and don't get 'consumed' in the same way that say a bag of potatoes would be. I don't necessarily agree that the price of houses shouldn't be in inflation, but it is there by proxy and the calculations do make some sense: https://www.brookings.edu/articles/how-does-the-consumer-price-index-account-for-the-cost-of-housing/ https://www.brookings.edu/articles/how-does-the-consumer-pri... So it is the cost of shelter rather than the prices of houses that determine inflation.
  • phendrenad2 1y ago
    Ah, I spot a familiar pattern here: the layman definition of a term, which has all of the political power, has diverged from the academic definition, which is completely powerless. The layman definition of inflation is "everything got more expensive". The academic definition seems to be "things got more expensive, but only if there isn't a shortage of that thing or too much demand(?)". I think the layman definition is more logical, because shortages and demand are solvable if there's enough monetary inventive, which is ultimately accounted for in, you guessed it, the final price.