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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

#161

Post by _0w8t »

foverzar wrote: post #122
ChuckNorris89 wrote: post #97

Earlier quoted context omitted.

>but completely impossible for country like Germany. There is not enough gas without Russian one to feed its industry. Huh, if only they could have invested enough in their local energy sector, through I don't know ... NUCLEAR! , to keep their industry energy independent of Russia, and not shut down its few remaining nukes in the middle of an energy crisis just to appease an outdated political ideology like an absolu…

You assume that oil and gas are only used as energy components, but they are also raw materials required in industry.

If energy usage is removed, then surely there is enough oil and gas in other countries to supply Germany.

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

#162

Post by danuker »

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 are two types of inflation:

- PRICE INFLATION, which is typically what is tracked by the CPI. If the CPI was, say, 100 last year, and 105 now, it means there was 5% inflation in the price of the basket of goods tracked by the BLS.

- MONETARY SUPPLY INFLATION. This is the total amount of currency in circulation. The US Federal Reserve publishes the M2 money supply. This is one factor that affects PRICE inflation (the first type), but if people don't spend a lot of the money supply each year, then prices don't increase a lot. The other factor affecting price inflation is MONETARY VELOCITY.

As for what affects relative differences (some goods getting more expensive than the general inflation, while others not as much), it is supply or demand. As demand changed, especially during the pandemic, supply struggled to adapt and match it, and maybe overshot and so on. The economy is not a steady state.

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

#163

Post by chalst »

cgio wrote: post #127
itsoktocry wrote: post #80

Earlier quoted context omitted.

> but for me there should be two types of inflations 1. a dilution of money Outside of the fact that "some people say" (generally anti-fed types) that inflation is an increase in the money supply, why is it you think that? In economics inflation has a specific definition: a general rise in the price level. It can be caused by all kinds of things. A rapid rise in the money supply is one. A breakdown in available suppl…

I would argue that goods prices also don’t display the same elasticity going down as they do going up. Whether they are less sticky I don’t know but will definitely look into relevant literature.

Few sellers into a market like the price going down, and labour prices are famously downwards inelastic, but price wars are a thing and many markets have an expectation that prices will go down, e.g., cloud computing costs in recent years. It's a mistake to try to completely detach your understanding of inflation from the commercial imperatives in specific markets.

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

#165

Post by lupire »

itsoktocry wrote: post #98
Sebb767 wrote: post #74

Earlier quoted context omitted.

> 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 More money does not necessarily mean decreased buying power. If you have more people or if the money isn't in circulation, the buying power will stay the same, therefore not causing inflation.

> If you have more people or if the money isn't in circulation, the buying power will stay the same, therefore not causing inflation. Exactly. Money is just another good in the economy (albeit a bit special). Its supply and demand ebbs and flows like any other. This is one of the things I find so funny about the known quantity trait of Bitcoin. Why would you want an underlying currency that can't increase its supply?…

Because if people use is less, it will decrease in value, making it attractive to spend, reaching equilibrium. It's not perfect, but either is "someone in charge prints a ton of money and gives it to their friends".

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

#166

Post by f0xJtpvHYTVQ88B »

itsoktocry wrote: post #80
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…

> but for me there should be two types of inflations 1. a dilution of money Outside of the fact that "some people say" (generally anti-fed types) that inflation is an increase in the money supply, why is it you think that? In economics inflation has a specific definition: a general rise in the price level. It can be caused by all kinds of things. A rapid rise in the money supply is one. A breakdown in available suppl…

Encyclopedia Britanica defines inflation as: inflation, in economics, collective increases in the supply of money, in money incomes, or in prices.

The first definition was the one used for centuries and the one that should still be used unless you are trying to confuse cause for effect.

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

#167

Post by vogre »

jgilias wrote: post #144
rjzzleep wrote: post #89

Earlier quoted context omitted.

I'm sorry, but the Estonian prime minister is a Eurocrat idiot that lacks basic understanding of how either military or economy work or operate. You want to be independent of Hydrocarbons and Russian commodities? Okay well the Chinese model of silently building up the capabilities to do that is one way to approach the issue. France is an even better example of the idiocy of this as France had one of the most advanced…

Yes, it's a problem that there are co-dependencies with Russia. Yes, it's a grave mistake that Europe didn't untangle from those right after 2014. But not untangling them now would be completely brain-dead. I mean... Russia is now a rogue state carrying out scorched earth tactics, officially rewarding units guilty of war crimes (killing of civilians, rape), threatening the world with nuclear weapons, hijacking planes…

No post body was provided.

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

#168

Post by Tade0 »

arguru wrote: post #64

Estonian here, the situation is getting quite bad indeed, particularly when it comes to petrol/energy prices, which of course has the domino effect of driving up other goods and services in the mid to long term. However, in true Estonian fashion, a lot of people (probably majority) might complain within their familily/friend circle, but will mostly just suffer through it. In fact, 10 years ago, two local comedian-act…

> However, in true Estonian fashion, a lot of people (probably majority) might complain within their familily/friend circle, but will mostly just suffer through it.

I think this is a generally post-soviet thing.

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

#169

Post by cced »

heavenlyblue wrote: post #137
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.

Bummer: all prices are included in the calculation, including salaries, so if products have increased 14% and salaries increased 0% then given that markets are relatively same, inflation is only 7%. From the perspective of a consumer though…

I don't understand this: they try in-out/flows as the same when calculating inflation?

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

#170

Post by lupire »

mft_ wrote: post #53
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…

Have salaries increased over recent years in line with the increase in money supply? I’ve certainly not seen this, but this is only anecdata. At my (consumer) level, the only obvious effect I can think of has been cheaper interest rates for loans.

During Covid, wages grew faster than ever in recent history, but slower than prices. On average.
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