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Estonia clocks fastest inflation in the Eurozone at 20.1 percent

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Re: Estonia clocks fastest inflation in the Eurozone at 20.1 percent

#111

Post by mostly_harmless »

yodsanklai wrote: post #36

I don't understand inflation. I understand that it's a measure of the price of things, but for me there should be two types of inflations 1. a dilution of money. Let say a central bank injects a lot of new money, then all prices will be higher, but salary will be higher too, and the overall effect is neutral 2. some prices increase due to change in supply or demand (e.g. gas or cereal), but salaries and everything el…

I think what's missing here is in case 1, it's not just the amount of money, but how much money is chasing each available good. You can imagine if the money supply doubles, a loaf of bread can be the same price as before if there are twice as many people demanding the same portion of bread (for a very crude approximation)

Or to put it another way, maybe case 1 is demand-side inflation, and case 2 is supply-side inflation.

Re: Estonia clocks fastest inflation in the Eurozone at 20.1 percent

#112

Post by pbz »

yodsanklai wrote: post #36

I don't understand inflation. I understand that it's a measure of the price of things, but for me there should be two types of inflations 1. a dilution of money. Let say a central bank injects a lot of new money, then all prices will be higher, but salary will be higher too, and the overall effect is neutral 2. some prices increase due to change in supply or demand (e.g. gas or cereal), but salaries and everything el…

There's this constant tug of war between supply/demand (also applies to powerful/regular folks, those with money/without, etc). Inflation is the delta by which one side is winning against the other.

Re: Estonia clocks fastest inflation in the Eurozone at 20.1 percent

#113

Post by itsoktocry »

piva00 wrote: post #61
rawbot wrote: post #35

Doesnt' every country calculate their inflation separately? Because living in Germany, that 7% is laughable. Nothing has risen by that little of an amount. Not food, rent, petrol, etc. Well, I do know of something that has risen to less than 7%: salaries.

When I look at the Swedish numbers I feel the same and then I see that prices went down for "photography, audiovisual and computer equipment" and... Nothing else. Fuel is up 40+%, food by 8-10%, housing by 2%, electricity by 30+%. How the fuck do we end up with a normalised rate of inflation of 6-7%?? I do need to do proper research on the models because just using my common sense it doesn't make any fucking sense...

>How the fuck do we end up with a normalised rate of inflation of 6-7%?

I don't know about Sweden, but the BLS publishes their data and methodology for the CPI calculation. You can quibble about details, that's fair, but it's transparent. It's based on a basket of goods and proportional spending on those goods in the basket. In some calculations food and fuel are excluded because of volatility (controversial, for obviously reasons). Like all averages, it's not going to accurate on any individual level.

Re: Estonia clocks fastest inflation in the Eurozone at 20.1 percent

#114

Post by foverzar »

lekevicius wrote: post #34
throwaway4good wrote: post #27

I am guessing the Baltic countries are hit hard by the Russia sanctions and the lack of cheap energy and food imports that has to come from somewhere else now.

Here in Lithuania we were already independent from Russian gas and oil (lesson learned over the decades), and had liquid natural gas terminal for a few years. But inflation is also very high.

> Here in Lithuania we were already independent from Russian gas and oil

Is that a fact? I know that Lithuania doesn't buy Russian oil and gas directly, but it always seemed to me that it is still the same Russian oil and gas, just through an intermediate supplier.

Re: Estonia clocks fastest inflation in the Eurozone at 20.1 percent

#115

Post by davzie »

glenngillen wrote: post #59
davzie wrote: post #33

Earlier quoted context omitted.

We have 9% inflation in the UK but the reality of the costs of things that you need to live a relatively simple life (food, heating oil, fuel costs), have all gone up way more than 9%. A shop that used to cost me £80 a week now cannot be had for under £110. So you can calculate them all you like and look at the data, but the reality in my life is that prices have risen way beyond the 9% we're told is the amount.

Here’s a post from last year that I thought did a great job of illustrating your point, and how misleading the reporting of a single inflation number is without also knowing the variance: https://economicsfromthetopdown.com/2021/11/24/the-truth-abo...

A great read thanks!

Re: Estonia clocks fastest inflation in the Eurozone at 20.1 percent

#116

Post by rax0m »

yodsanklai wrote: post #36

I don't understand inflation. I understand that it's a measure of the price of things, but for me there should be two types of inflations 1. a dilution of money. Let say a central bank injects a lot of new money, then all prices will be higher, but salary will be higher too, and the overall effect is neutral 2. some prices increase due to change in supply or demand (e.g. gas or cereal), but salaries and everything el…

Inflation is an increase in the money supply.

If you see everything from this lens then it all makes sense.

Prices of specific commodities and consumables may rise or fall, but if the money supply and demand remains the same the overall combined price of everything remains the same.

Re: Estonia clocks fastest inflation in the Eurozone at 20.1 percent

#117

Post by 627467 »

yodsanklai wrote: post #36

I don't understand inflation. I understand that it's a measure of the price of things, but for me there should be two types of inflations 1. a dilution of money. Let say a central bank injects a lot of new money, then all prices will be higher, but salary will be higher too, and the overall effect is neutral 2. some prices increase due to change in supply or demand (e.g. gas or cereal), but salaries and everything el…

> I don't understand inflation

Justifying inflation is a bit like justifying climate change: everyone (or at least most) agree on the effect but there are as many chains of causation as people who agree on the effect

Re: Estonia clocks fastest inflation in the Eurozone at 20.1 percent

#118

Post by piva00 »

itsoktocry wrote: post #113
piva00 wrote: post #61

Earlier quoted context omitted.

When I look at the Swedish numbers I feel the same and then I see that prices went down for "photography, audiovisual and computer equipment" and... Nothing else. Fuel is up 40+%, food by 8-10%, housing by 2%, electricity by 30+%. How the fuck do we end up with a normalised rate of inflation of 6-7%?? I do need to do proper research on the models because just using my common sense it doesn't make any fucking sense...

> How the fuck do we end up with a normalised rate of inflation of 6-7%? I don't know about Sweden, but the BLS publishes their data and methodology for the CPI calculation. You can quibble about details, that's fair, but it's transparent. It's based on a basket of goods and proportional spending on those goods in the basket. In some calculations food and fuel are excluded because of volatility (controversial, for ob…

SCB (Statistiska centralbyrån) very likely does the same, like I mentioned in my comment I need to dig deeper and find the details because the numbers don't make sense for my friends and mine reality so there's something in the modelling that doesn't match the lives I have anecdotal experience with.

Re: Estonia clocks fastest inflation in the Eurozone at 20.1 percent

#119

Post by doikor »

state_less wrote: post #68

Can anyone confirm mortgage rates in Estonia? This site[1] says ~ 2% mortgage rate, which means a -18% real rate, further pushing demand for real assets instead of paper debts. I think the US is closer to neutral, but we still have a negative mortgage real rate at the current inflation level. 1. https://www.theglobaleconomy.com/Estonia/mortgage_interest_r...

Not 100% sure about Estonia but at least here in Finland mortgages are usually some margin + Euribor. Maybe with optional cap on max interest rate (that usually pushes the margin up to compensate). If you manage to get a fixed rate it is usually way higher then Euribor at that moment and still only fixed for the first 7 or 10 years of the loan after that usually 12month Euribor.

For example I am currently paying only margin (Euribor was still negative when the Euribor rate was last updated for the 12month rate that I am using) so 0.4%. With Euribor steadily creeping up expecting to 3 or 4x the interest portion of my loan at the end of the year but not a big deal personally.

Re: Estonia clocks fastest inflation in the Eurozone at 20.1 percent

#120

Post by rwmj »

gambiting wrote: post #105
toxik wrote: post #67

Earlier quoted context omitted.

That is exactly what inflation is computed from. Like literally.

Then how can it be only 9%? My gas price has increased by 200% in the last few months. In August, my electricity is going up 400%. Petrol alone has gone up by about 50% compared to few months back. Sure bread is still roughly the same as it was. But living costs have absolutely exploded recently, and far far beyond the 9% indicated.

You can calculate your personal inflation rate although you need to start by tracking your expenditures: https://monevator.com/personal-inflation-rate/
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