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by jonas21 1977 days ago
I don't get it. If wages are stagnant and prices are stagnant, isn't that by definition zero inflation?
2 comments

You have to do quite a bit of statistical gymnastics to come to the conclusion that wages are stagnant. Wages are almost always increasing. The stagnation observations come up when you account for inflation (a statistic called real wages). Until recently, real wages had peaked in 1973, so if you only had two points of data, February 1973 and March 2019, they would make a perfectly flat line on a graph. That’s where you get your “stagnation”. In reality, they steadily trended downwards between the early 70s and mid 90s, and have since then been steadily trending upwards between the mid 90s and today. I’m sure COVID is going to confound this to a non-trivial extent, but in 2019 they were at the highest level recorded.
Prices are not stagnant. You can see that quite clearly from the average price of a big mac over the years.