Why the government took home prices out of its main inflation index
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Why the government took home prices out of its main inflation index
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Re: Why the government took home prices out of its main inflation index
#2No post body was provided.
Re: Why the government took home prices out of its main inflation index
#3Quoted post unavailable.
Did you read the article? There's a paper that recreated what the inflation rate would have been with the old method, and it tracks the new method closely, but just has more volatility.
Re: Why the government took home prices out of its main inflation index
#4For those that only read the headline, the article is much more interesting. There's a paper that recreated what the inflation rate would have been with the old method, and it tracks the new method closely, but just has more volatility. Plus, "the government" didn't take home prices out, they just switched to a different approach to tracking them.
Re: Why the government took home prices out of its main inflation index
#5Quoted post unavailable.
While I do like the latter, a house is a fairly rare purchase in one's life. Admittedly, a very major, rare purchase. But typically a rare one nonetheless. My weekly grocery runs are more indicative of CPI to me.
Re: Why the government took home prices out of its main inflation index
#6> Counting both the home purchase price and mortgage payments was double counting.
That seems so blindingly obvious a flaw in the old methodology that I’m surprised that was ever implemented in the first place.
Re: Why the government took home prices out of its main inflation index
#7> In 1983, the BLS switched to a new method called owners’ equivalent rent.
A big problem in the housing debate is that almost everyone (lay people, media, politicians, advocates) carelessly conflate "houses", "homes" (including apartments/condos), "real estate/property" (land + structure), and "housing" (including buying and renting), and don't even try to factor in interest rate effects, so all the math is just nonsense mixing apples and sharks.
Re: Why the government took home prices out of its main inflation index
#8Quoted post unavailable.
While I do like the latter, a house is a fairly rare purchase in one's life. Admittedly, a very major, rare purchase. But typically a rare one nonetheless. My weekly grocery runs are more indicative of CPI to me.
Sure, but housing prices will directly effect the price someone can buy and offer it to be rented out which has a huge monthly effect on a large portion of the population.
Re: Why the government took home prices out of its main inflation index
#9For those that only read the headline, the article is much more interesting. There's a paper that recreated what the inflation rate would have been with the old method, and it tracks the new method closely, but just has more volatility. Plus, "the government" didn't take home prices out, they just switched to a different approach to tracking them.
I think the “new” (now 39 years old) method is superior overall, but I think it’s entirely factually correct that they took home prices out of the index.
They did not take housing expenses out, which is what many people whose sole exposure to economics is via memes seem to think/be encouraged to think.
Re: Why the government took home prices out of its main inflation index
#10Quoted post unavailable.
While I do like the latter, a house is a fairly rare purchase in one's life. Admittedly, a very major, rare purchase. But typically a rare one nonetheless. My weekly grocery runs are more indicative of CPI to me.
Rare for you an individual, but on overall common.
Catastrophic medical expenses and college are similar, and inflation in those is very important overall.