5 ms·

I disagree with the idea that the logarithmic graph is better. It makes it far harder to see the major (and most important) feature of the first graph: a period

by thras 17y ago

I disagree with the idea that the logarithmic graph is better. It makes it far harder to see the major (and most important) feature of the first graph: a period of relative stability in purchasing power between 1665 and 1945, followed by rapid currency devaluation. Your graph obscures that feature, and replaces it with no useful information. The best piece I've read about the 20th century shift to our current regime of inflation was Dalrymple's recent City Journal article. http://www.city-journal.org/2009/19_3_otbie-inflation.html http://www.city-journal.org/2009/19_3_otbie-inflation.html Sure, inflation is just a kind of wealth redistribution. But wealth redistribution has certain effects. In general, it destroys more than it creates.

iamwil 17y ago
"It makes it far harder to see the major (and most important) feature of the first graph" Not if one has learned to read logarithmic graphs. It took me a semester of solid state electronics class (full of log graphs) to get the hang of it, but once you're use to the idea that a straight rising line is exponential, it's easy to see what you say is the most important feature: rapid currency devaluation after 1945. In fact, because it's a log graph, you can tell that it's rising faster than base 10 exponential, because it's still a curve and not a straight line. In addition, because it's a log graph, the large values on the right doesn't dwarf the smaller values on the left. Now, you can see details of what the price change was like locally in time across the board. I'd say there's some useful information there in a log graph. Now if you were saying that log graphs would be dubious to use for the general public, then maybe you'd have something there.
- thras 17y ago
  I can read logarithmic graphs. And it took longer for my brain to pick out that feature in the second graph. Remember that there is always information trade-off going to a log-scale. In this case, I argue that the trade-off is not worth it. The first graph has a clear and recognizable feature. The second graph is noisy.
ajross 17y ago
This is sensationalism. What this graph measures is the move away from asset-backed currency and towards a finance-based central bank. That creates inflation, which is true. It also decouples growth from gold mine output, which is more important. Try graphing GDP per capita across the same range, and note that there's an equivalent jump in the derivative at the same time. Basically, this is a feature, not a bug. Macroeconomics can be terribly dangerous in the wrong hands.

by thras 17y ago

iamwil 17y ago

"It makes it far harder to see the major (and most important) feature of the first graph" Not if one has learned to read logarithmic graphs. It took me a semester of solid state electronics class (full of log graphs) to get the hang of it, but once you're use to the idea that a straight rising line is exponential, it's easy to see what you say is the most important feature: rapid currency devaluation after 1945. In fact, because it's a log graph, you can tell that it's rising faster than base 10 exponential, because it's still a curve and not a straight line. In addition, because it's a log graph, the large values on the right doesn't dwarf the smaller values on the left. Now, you can see details of what the price change was like locally in time across the board. I'd say there's some useful information there in a log graph. Now if you were saying that log graphs would be dubious to use for the general public, then maybe you'd have something there.

thras 17y ago
I can read logarithmic graphs. And it took longer for my brain to pick out that feature in the second graph. Remember that there is always information trade-off going to a log-scale. In this case, I argue that the trade-off is not worth it. The first graph has a clear and recognizable feature. The second graph is noisy.

ajross 17y ago

This is sensationalism. What this graph measures is the move away from asset-backed currency and towards a finance-based central bank. That creates inflation, which is true. It also decouples growth from gold mine output, which is more important. Try graphing GDP per capita across the same range, and note that there's an equivalent jump in the derivative at the same time. Basically, this is a feature, not a bug. Macroeconomics can be terribly dangerous in the wrong hands.