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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

#181

Post by puranjay »

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…

A lot of it had to do with the really weird demand patterns that developed over the last two years. We went from 100 demand to 20 as lockdowns happened, then 200 demand as economies opened, then back to 20 again as a new wave of lockdowns took hold.

If you were a manufacturer, you had no real way to deal with this unpredictability. Do you add capacity to cater to the post-lockdown 200 demand? If you do, you might end up with too much inventory as demand goes back to the usual 100.

Throw in the clogged up ports and higher input costs due to Russia-Ukraine war and we have this strange period where everyone is confused and no one really knows what to do

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

#182

Post by lupire »

nathias wrote: post #139
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 is monetary supply inflation (increase in quantity of money), which WOULD be neutral if you would do an airdrop to everyone in economy in the same proportions and this would then be the same as price inflation, but that kind of inflation would be useless. What is going on is the goverment prints money, gives it to the largest economic actors, to 'stimulate the economy' and then it 'trickles down' and we get inc…

PPP and Covid unemployment checks aren't pure trickle-down.

Obviously giving money directly consumers is going to cause more consumer price increases than people who don't buy consumer goods.

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

#183

Post by jrib »

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…

> the overall effect is neutral

Even if the injected money were to be distributed evenly, people holding a lot of savings in the form of cash are penalized when compared to those with assets and debt.

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

#184

Post by jameshart »

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 no such thing as ‘the economy’. There is only ‘lots of people making independent decisions’

Inflation is a measurement one of the observable effects of all of those decisions over time. Businesses deciding how to set prices and when to offer discounts and what products or services to offer. Customers deciding what businesses to purchase from.

Inflation isn’t something that ‘does things’. It is a thing that happens.

And inflation alone isn’t a very interesting number - what really matters is economic activity.

Like, if Alice sells widgets for $10, and Bob has $100 to budget for widgets, he’ll buy ten widgets.

If Alice increases her prices by 10%, if Bob can’t also increase his widget budget, he’s going to wind up only buying 9 widgets. But if Bob also finds he can increase his budget by 10% he’ll still go ahead and buy 10 widgets.

The distinction you’re making above is just between cases where the same degree of inflation is accompanied by different changes in economic activity.

And the causal relationships between inflation and economic growth are not simple, linear, universal, or unidirectional.

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

#185

Post by dontbenebby »

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…

>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.

People always focus on the price of gas in America, since it's a large expense and they commute a lot, but no one seems to talk about the effect it has on the prices of anything shipped in a vehicle that uses petrol.

Then again, some Americans do things like fill up across the border and freak out when between CAD sometimes having a 25 percent difference and them using pricing in liters not gallons, they paid many multiples of what they intended than much less fuel than they thought they got, despite having clear information on pricing, volume, and approximate currency value.

(It might be a 25 percent difference, but if you looked on your phone or in a currency shop, the difference for currency traders versus the public was only a few percent, it didn't jump around by double digits in a single day, and often if the difference was small people just would take the same amount as CAD in USD to be polite, when they could rightfully tell you pay in CAD, or get out of my shop, I'm not your friend you weird little Pennsylvanian.)

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

#186

Post by puranjay »

throwaway4good wrote: post #107
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.

The stated 7% loosely corresponds to what I am seeing. Remember it is a broad statistic. So even though you notice your kebab going from 5 to 6 euros, you may not notice that a new pair of glasses is the same price as it was last year.

I'm sure CPI calculations include the frequency of consumption too. You eat a kebab every day, but buy glasses maybe once in two years.

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

#187

Post by QuarterReptile »

chalst wrote: post #163
cgio wrote: post #127

Earlier quoted context omitted.

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.

I would venture that sellers overwhelmingly prefer stable prices to increasing prices. Rising prices require adjustment, which requires resources, and makes you the focus of customers' ire for what amounted to trying to keep things running the same. Meanwhile, any seller raising prices is setting up for a short- or long-term substitution effect away from their products.

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

#188

Post by mytherin »

yuropeen wrote: post #55
toxik wrote: post #50

Earlier quoted context omitted.

Basic econometrics is now useless under the parole of “lies, damn lies”. Good stuff. How about you propose a different metric then, that surely will be infallible and completely fair to everyone.

Quoted post unavailable.

> Food, Fuel, Housing - You know, the basics.

So, exactly what the HICP contains then [1]?

[1] https://ec.europa.eu/eurostat/statistics-explained/index.php...

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

#189

Post by ericmay »

vogre wrote: post #172
jgilias wrote: post #121

Earlier quoted context omitted.

If it was _just_ getting colonized, that's one thing. The alternative for Baltics is not that benign. See Mariupol, Buchi, Irpin, etc, etc, etc...

Why not see Armenia or even modern Georgia, who don't use aggressive rhetorics on Russia, don't deploy NATO weapons and feel okay?

Mainly because in the case of Estonia, for example, they don't use aggressive rhetoric toward Russia but are threatened anyway. Finland has continuously been threatened during this time despite 70+ years of balancing both the Soviet Union and NATO and while more culturally compatible with NATO they spent a lot of effort to be friendly and neutral with the USSR.

Georgia was invaded in 2008 [1].

> don't deploy NATO weapons and feel okay?

Estonia and other countries near Russia historically didn't really have a ton of NATO weapons deployments specifically because NATO wasn't intent on aggravating Russia. Training exercises from time to time because they're allies but that's about it. Troop buildups and weapons deployments have strictly been in response to the war in Ukraine which was launched by Russia. Sovereign states have the right under international law (law that Russia signed by the way) to choose their own defense arrangements and conduct their own affairs.

[1] https://en.wikipedia.org/wiki/Russo-Georgian_War

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

#190

Post by lupire »

macinjosh wrote: post #132
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…

We are experiencing both. During the pandemic governments inflated the money supply to fund vaccines, cash payouts to citizens, and huge programs to keep payrolls flowing. The pandemic also increased demand on consumer goods because people were spending their stimulus checks on goods since you couldn't go out or travel. Add on the fact that there are shortages of goods because many producers were slowed down signific…

Consumer spending decreased during Covid, then rebounded. The extra money was poured into the stock market and cryptocurrency bubbles.

https://www.bls.gov/opub/ted/2022/changes-to-consumer-expend...

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