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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

#231

Post by zeroonetwothree »

Sebb767 wrote: post #74
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…

> 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.

Typically when we say “more money” we mean more money in circulation. What’s the point of any other meaning?

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

#232

Post by Vinnl »

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.

I think there's been a move towards unity within the EU at least; for the past year or so, I think, Dutch articles on inflation [1] have been explicitly stating that they were calculated using the "European calculation method", while comparing them to what the numbers would have been with the previous Dutch method. I presume the latter will slowly disappear as we get used to the EU method.

[1] https://nos.nl/artikel/2430862-inflatie-nog-steeds-hoog-maar...

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

#233

Post by vogre »

rjzzleep wrote: post #212
_0w8t wrote: post #161

Earlier quoted context omitted.

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

People like you look at these things as if you just shift numbers around on an excel sheet. There is still physics and geography involved here. German industry is already hardly competitive in terms of price, what do you think happens when those raw materials are 10 times more expensive? Now there is a price crunch for LNG tanker charters further pushing up prices. Also it's so disingenuous. Indians are now refining…

Don't forget that LNG market is mostly short-term, and Russian pipes work under long-term contracts.

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

#234

Post by zeroonetwothree »

mnd999 wrote: post #133
mostly_harmless wrote: post #111

Earlier quoted context omitted.

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 infla…

If the money is doubled but most of it goes into offshore investment funds because those on the receiving end already have enough bread then the price of bread doesn’t really change, but venture cap funding becomes more readily available.

An investment fund is not a bank vault. The money leaves the fund and enters the economy. In particular it will be invested in companies, which will use it to buy assets and pay wages. The effect is similar as if you had spent it in the first place.

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

#235

Post by em500 »

Grimburger wrote: post #179
toxik wrote: post #67

Earlier quoted context omitted.

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

I can agree with this but basket substitution is the dirty little secret of economists. If the cost of meat goes up so much that everyone starts eating dog food, the inflation print will barely rise at all. It's not a real measure for QoL which I hope most people would accept as being what societies actually strive for. In fact most measures like GDP and a few others have no real bearing on increased living standards…

It's not much of a secret when even in high school economics class I was taught about different substitution methods (Paasche, Laspeyres[1]) with various drawbacks.

It's done because factually consumers buy different and producers produce different things over the years, and it's hard to impossible to observe/measure which substitutions are by necessity and which by preference.

[1] https://en.wikipedia.org/wiki/Price_index#Paasche_and_Laspey...

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

#236

Post by at0mic22 »

capableweb wrote: post #10
raptorraver wrote: post #6

Earlier quoted context omitted.

Can you elaborate what you mean?

Estonia has for quite some time tried to establish itself as a "Startup HQ" for startups both in Estonia and from the world outside of Estonia. As a result, Estonia has the 3rd highest startups-per-capita compared to other countries in Europe.

Oh this is a very funny topic.

You are probably aware that IT startups require engineers. And in Estonia there's only one tech university with a very arguable level of education.

Working in this field for decades, can assure you that for recent years Estonia made a huge progress in importing engineers from Russia, Belarus and Ukraine. Those high-quality engineers actually made it the Startup HQ of Baltics.

As for now, the immigration policy does not permit any work visas for Russian or Belarusian citizens, so this flow is depleted. Ukrainians have stopped coming here few years ago as salary levels were higher in Kyiv and it made no sense in coming to Tallinn. Today they just can't leave the country.

The biggest motivator for engineers from mentioned countries to come to Tallinn was the big Russian-speaking community, which made it "live in Europe, speak in native language" for them. As of today, the pressure on Russian language based education is extremely big, and having kids you want to teach in native language, coming to Estonia for Russian-speaking developers makes no more sense .

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

#237

Post by roenxi »

pydry wrote: post #204
roenxi wrote: post #160

Earlier quoted context omitted.

> It can be caused by all kinds of things. In theory water can run uphill. Sometimes it even does. But as a matter of overwhelming practice it is obvious that if the general price of goods is rising it is the government doing something. Otherwise there is nearly nothing that could cause a correlated rise of the price of everything. Eg, in this case the most likely culprit is wilfully shutting down the global economy…

>In theory water can run uphill. Sometimes it even does. But as a matter of overwhelming practice it is obvious that if the general price of goods is rising it is the government doing something. Otherwise there is nearly nothing that could cause a correlated rise of the price of everything. This caused general inflation of nearly everything https://en.wikipedia.org/wiki/1970s_energy_crisis There is never a perfectly…

Ah the 70s energy crisis. I remember it like it was ... half a century ago. In fact I don't remember it because I'm younger than 80. I wasn't even alive.

Most people on this forum weren't even alive then. And we now live in an era where governments are inexplicably opposed to any of the easy options to secure energy. We should have been going nuclear in the 80s, 90s, 00s, 10s and now the 20s.

So while I'm happy to say that if we have an energy crisis that will cause inflation it isn't like we didn't see it coming 30-40 years in advance. The anti-fuel drive of the last decade hasn't helped any either. And I still blame regulatory interference.

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

#238

Post by deepsun »

throw457 wrote: post #30
deepsun wrote: post #5

Wow, 20 percent is close to hyperinflation.

You should at least know what hyperinflation is before you make statements.

I know it first-hand, lived through it after the fall of USSR.

Hovewer, I don't know the exact threshold to be considered "hyper", that's right.

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

#239

Post by Cthulhu_ »

onlyrealcuzzo wrote: post #216
unicornfinder wrote: post #42

Earlier quoted context omitted.

Thing is even if you're not using Russian gas directly, prices are still going to be influenced by the global gas market (and the wider global economy in general).

IIUC, Russian oil is roughly the same price as it was before the invasion: https://www.statista.com/statistics/1112243/urals-crude-oil-... Other oil has gone up so much because everyone is switching off Russian oil. Russian oil is not going up. So it's actually not a bad time to be a Russian oil consumer...

Russian oil and gas should actually be cheaper because demand has dropped sharply.

Anyway it's a very bad time to be a Russian oil consumer, because you'll be funding an unprovoked invasion and the countries that have sanctioned Russia may not want to deal with you.

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

#240

Post by zeroonetwothree »

mostly_harmless wrote: post #111
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 infla…

It’s hard to imagine that demand for bread doubling doesn’t result in the price going up. I don’t think this is the example you were going for.
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