Hacker News new | ask | show | jobs
by bko 1708 days ago
Just look at the personal savings rate. It shot up from less than 10% to over 30% and now back down. This was the stimulus checks which people pocketed and used to buy financial assets. That's another form of inflation but the "good" kind that us rich capital holders like. Eventually this money will re-enter the market and push up prices for every day goods.

Also official inflation rate isn't based on a fixed basket of goods, but changes. For instance, if chicken becomes more expensive, they weigh beef more. But pretty much anyone that's been to a restaurant in the last 6 months can tell you that prices are up a lot more than 5%. I guess just eat out less, right?

https://fred.stlouisfed.org/series/PSAVERT
1 comments
OldHand2018 1708 days ago
> I guess just eat out less, right?

Yes.

Adjusting behavior based on increasing prices (or, alternately, increasing wages) is normal.

link
bko 1708 days ago
That's fine, but I don't want my inflation measure to make those decisions for me because its obviously gamed. Just tell me how much stuff costs relative to the past.
link
OldHand2018 1708 days ago
It's not obvious that it is gamed.

In the short-term these adjustments feel wrong. But at what point does a no-adjustment inflation measure stop measuring inflation?

Buggy whips and hats are not in current inflation measures. Long ago, computers and airline tickets weren't in inflation measures. When did "eating at restaurants" become enough of a thing that it became part of inflation measurement? Restaurants have existed a really long time, no? Ancient Romans had "fast food".

Zoom out and think about it. Entire product categories come and go from our daily lives. Is there any possible method for understanding "how much stuff costs relative to the past" that doesn't look janky in the short run? This is a hard problem.

FYI - there are 100 or more different CPI series that are published. The news reports on a single one - the one that applies to the largest number of people in the US. You may find that a different one is more applicable to your particular circumstance.

link