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The Ultimate Guide to Inflation

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Re: The Ultimate Guide to Inflation

#141

Post by habibur »

cortesoft wrote: post #34

I've wondered what the effect our modern digital economy has had on consumer price inflation. Normally, an increase in money supply would cause consumer goods to increase in price, since more people are able to buy them and there is a limit on how much of any particular physical good is available. This isn't the case, however, for digital goods. If there are suddenly 100 million new people who want to buy a Netflix s…

Inflation means consumer's purchasing power remains the same, regardless of money supply. Therefore in an inflated economy people won't have the extra money now to subscribe to Netflix as they still are struggling to make ends meet even with the extra money, as everything else has increased in price proportional to his income increase.

Re: The Ultimate Guide to Inflation

#142

Post by xyzzyz »

paulpauper wrote: post #110
Negitivefrags wrote: post #103

Earlier quoted context omitted.

To quote a recent Scott Alexander blog post: The post-WWII-but-pre-1970 economic world - the world of “embedded liberalism” - was a pleasant place. There were corporations, but they didn't do anything garish like compete with each other. Executive pay was taxed so heavily that nobody had much incentive to try to increase their profit margin; workforces were so heavily unionized that companies were nervous about any c…

was it really so pleasant? inflation was very high, medical treatments were not so great, entertainment was expensive, most jobs still did not pay much, hours were long. Someone with a tech job probably earns more money on an inflation-adjusted basis and has a much nicer standard of living compared to someone living in the 60s

Inflation was not high in 1945-1970. It was high after 1970.

Re: The Ultimate Guide to Inflation

#143

Post by sbelskie »

vmception wrote: post #140
sbelskie wrote: post #132

Earlier quoted context omitted.

I’m not a lawyer or a scholar on these matters, so can you help point me to the Court of Claims you mean? The only one I can find no longer exists: “The Court of Claims was a federal court that heard claims against the United States government. It was established in 1855, renamed in 1948 to the United States Court of Claims (67 Stat. 226), and abolished in 1982.”

The court of federal claims still exists, odd one word messed up your google-fu

It was an honest question. It didn’t mess up any googling. I just don’t know anything about the particular legal structure/origin/whatever of the court you brought up, and so I had no way to know if the slight difference in name was meaningful or not.

Re: The Ultimate Guide to Inflation

#144

Post by vsareto »

paulpauper wrote: post #131
vsareto wrote: post #126

Earlier quoted context omitted.

If you believe that post scarcity is possible at all, you might consider that space colonization is also possible, but that brings about new significant requirements and needs that our economy will have to meet. Personally I think our civilization's ambition needs to expand so that happens. If we are still putting the "American Dream" as a goal when that can be built and satisfied cheaply by automation, then our goal…

it does not have to be either/or. some people can live a low-impact, low-cost post-scarcity lifestyle, while others can aim/aspire for more abundance

Oh I'm not saying we force people to do space jobs or livings, only that it should wayyyyy more accessible and common than it currently is and certain sectors of the economy will need to support that. It gives us more of what we can't realistically create on Earth, which is more land.

The American dream is a challenge for people now. If we advance to where it's no longer a challenge because the pieces of that are plentiful and cheap and is given to everyone by virtue of existing, then we need a higher challenge because we've essentially "solved survival on Earth" and must now expand. IMO it's way better than just becoming an economy that focuses on producing luxuries or inventing new financial gadgets.

Re: The Ultimate Guide to Inflation

#146

Post by aisengard »

dr_zoidberg wrote: post #109
alex_smart wrote: post #71

Earlier quoted context omitted.

>The marginal cost for a new subscriber is practically zero, so there should be no price increase caused by a shortage. Yeah, I don't think that that argument works at all. The price does not increase due to "shortage", it increases due to an increase in consumers' willingness to pay. Going by the Netflix example, if Netflix realizes that not too many people will cancel their subscriptions if they were to increase th…

It's also debatable that there are no costs associated with digital goods. If suddenly Netflix had a surge in subscribers and they doubled them over a short period of time, they'd have to invest in infrastructure to support the extra demand. That would cost them in hardware and human resoursces to handle the extra demand. But yeah, digital services have a better situation at meeting demand than physical goods of whic…

But the surge in revenue from doubling subscribers would (way) more than cover any costs in infrastructure spending. This would not drive any increase in subscription cost, which is purely governed by the competition and content acquisition costs, paired with whatever magic number the major investors/board decides is an acceptable profit margin.

Re: The Ultimate Guide to Inflation

#147

Post by syshum »

sologoub wrote: post #114

This chart in the expense share of a typical income illustrates a number of issues well, but healthcare stands out like crazy: https://mobile.twitter.com/_cingraham/status/123195012984367... College, transportation and housing are all pretty high overall, but the healthcare share is just stunning. If we were looking at dramatically better outcomes or services, fine. Unfortunately, doctors get to see patients for less…

>>Most other developed nations put a stop to this a long time ago…

hmm I wonder if there might be a connection there... as other nation implement price controls a larger part of the R&D and the costs associated with that are born by the US

Further Medicare / medicaid price controls to keep the cost of the entitlement program from going bankrupt has transferred the cost to patients not on those programs

Third leg of this stool is standard of care, American patients have a high exception for standard of care then in "most other developed" nations where waiting months for a specialist is accepted as normal, or having ward style hospital rooms is normal as well. Where the US we expect must faster treatment times, and semiprivate rooms normally with no more than 2 people to a room, though 4 to a room has become more popular in some regions. This increases costs

Re: The Ultimate Guide to Inflation

#148

Post by syshum »

neuroma wrote: post #119
sologoub wrote: post #114

This chart in the expense share of a typical income illustrates a number of issues well, but healthcare stands out like crazy: https://mobile.twitter.com/_cingraham/status/123195012984367... College, transportation and housing are all pretty high overall, but the healthcare share is just stunning. If we were looking at dramatically better outcomes or services, fine. Unfortunately, doctors get to see patients for less…

I presume you are in the USA. I watch and marvel at how the USA has such expensive health care and yet apparently has poorer outcomes than other G10 nations, in aggregate. The NHS in my home country is undergoing privatisation of the more lucrative or self-contained components. But it seems important for other countries to watch and learn from this example because free market economics are so often heralded as a solu…

>>yet apparently has poorer outcomes than other G10 nations

I assume you have data for this? Something more than the flawed infant mortality rate that is often cited but is a very poor judge of a health system in reality?

Something like 5 year cancer survival rates. Time a person waits on Specialist Wait List, the time it takes a person to get a replacement Hip, MIR, or Heart Stent. All of which I believe the US is very high or at the top of those statistics

Re: The Ultimate Guide to Inflation

#149

Post by TchoBeer »

lupire wrote: post #40
cortesoft wrote: post #34

I've wondered what the effect our modern digital economy has had on consumer price inflation. Normally, an increase in money supply would cause consumer goods to increase in price, since more people are able to buy them and there is a limit on how much of any particular physical good is available. This isn't the case, however, for digital goods. If there are suddenly 100 million new people who want to buy a Netflix s…

Businesses charge what customers are willing to pay. If they have more money, they are willing to pay more. Competitiuis the countervailing force, but Netflix has exclusives and serials and network effects (fandoms and friends)

If you permit me to be terribly econ 101 about this, if netflix had a perfectly elastic supply curve (because the marginal cost of an extra netflix subscriber is fixed and doesn't increase with high numbers of subscribers) then an increase in demand would lead to an increase in quantity supplied but not an increase in price.

Re: The Ultimate Guide to Inflation

#150

Post by XorNot »

kebman wrote: post #74
Edman274 wrote: post #65

Earlier quoted context omitted.

If you zoom out to 20 years it shows that back in 2011 the same thing happened; did we have hyperinflation in 2011 or huge price increases in food in 2011?

I didn't say we'd have hyper-inflation. I said we'd have inflation, and the banks are saying that too, btw. What we're seeing now isn't just some seasonal pump, but a huge across the board pump. Of course, if wages also reflect that increase, then there's not much of a problem. But what we're facing today is massive unemployment, and a massive amount of money sitting un-touched in banks, sometimes with negative inter…

And there it is. An HN econ discussion with the requisite declaration that hyperinflation is just around the corner.

Its too bad I can't buy futures on hyperinflation not happening when people on HN predict it will.

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