[drbig]

As much as the notion of "Purchasing Power" is <macro>economic, thus perhaps having a greater chance of being related to reality, I've been wondering if - and how - could these long-term measures account for greater diversity and "scale" of "things money can buy".

Nowadays if you're properly rich you can buy a seat on a sub-orbital flight. This wasn't an option in '00, no matter how rich you were.

On the other end of the scale, for basic things a (really) good quality loaf of bread will always be cheaper in Poland than say up north from Oslo, Norway; whereas a USA-designed made-in-China laptop pretty much never did scale with the rest of the "CPI basket"...

Point being: we sure do have numbers - what they really mean in practice is vague at best.

[SpicyLemonZest]

The PCE measure attempts to account for this in a more principled way. But precisely because it's trying to, it can't be reported as quickly, since there's no way to know how much a price change impacts PCE until you know how consumer behavior changed along with it. So the CPI data gets reported first (we got February CPI data in the middle of last month while PCE data isn't expected until Thursday), and thus drives media conversations about inflation.

[vessenes]

The best example I heard recently was anesthesia. Costs less than $5 to make. Worth a lot more if you have surgery coming up.

[ambicapter]

The cost of anesthesia is surely concentrated in the labor involved more so than the cost of the chemicals, no?

[vessenes]

The example is supposed to illuminate the limits of ppp or gdp adjustment. Anesthesia contributes almost nothing to gdp, but it matters more than almost anything to you if you need surgery.

[drbig]

> The example is supposed to illuminate the limits of ppp or gdp adjustment.

... Yes, but that's like exemplifying the value of an actual slice of bread vs bitcoin to someone who is hungry.

Macroeconomic numbers may have an impact on the local - as in the individual scale - but that's neither the topic nor the thread.