The true costs of inflation in small-town Texas

Post by marvin » Fri, Jul 22, 2022, 7:09 AM UTC

missedthecue wrote: post #105

lend000 wrote: post #102

Earlier quoted context omitted.

CPI has been engineered to meet targets for a long time. Several major flaws with CPI: Hedonic adjustments are more or less at the mercy of the bureaucrats. For example, new vehicles did not go up in hedonic-adjusted price from 1997 to 2020 according to the BLS [0]. The justification is that new cars have bluetooth and other features that counter-act the price change. An automatic Toyota Corolla was $12373 brand new…

I agree in general about the hedonic adjustments and their potential for manipulation or miscalculation. But automobiles are probably the worst example! Toyota didn't even roll out passenger side airbags until 1998. Only the driver had them prior to this. The new Corolla has 8 airbags. Today we have better fuel efficiency, collision protection, driver assistance, remote start... Even the seats are more comfortable. N…

Post by tchalla » Fri, Jul 22, 2022, 7:13 AM UTC

chomp wrote: post #88

oldjavacoder wrote: post #85

Earlier quoted context omitted.

"My point isn't that inflation doesn't exist." My wife tells me different, so I'm going with her real world experience in the matter.

If you or your wife look at the past and current price of lettuce in the local store and then use that to make the conclusion that the purchasing power of the US Dollar has decreased 47%, then I don't know what to tell you. Your cost of living may have increased, but I do not understand how you can conclude an increase in inflation from living your daily life.

Post by pengaru » Fri, Jul 22, 2022, 7:35 AM UTC

Post by RC_ITR » Fri, Jul 22, 2022, 7:54 AM UTC

konschubert wrote: post #117

once_inc wrote: post #114

Earlier quoted context omitted.

The term "Inflation" is used in two forms interchangeably by most people, and this leads to miscommunication. Inflation is used for: (a) price inflation: increasing prices for individual goods. (b) monetary inflation: an increase in the amount of money used. Both types of inflation means you get less goods for the same amount of (in this instance) Dollars. Monetary inflation (b) is mostly created by central banks and…

Inflation is when the ratio of / grows. This can happen by the numerator growing (your (a)) or the denominator shrinking (your (b)).

Post by RC_ITR » Fri, Jul 22, 2022, 7:59 AM UTC

lend000 wrote: post #111

missedthecue wrote: post #105

Earlier quoted context omitted.

I agree in general about the hedonic adjustments and their potential for manipulation or miscalculation. But automobiles are probably the worst example! Toyota didn't even roll out passenger side airbags until 1998. Only the driver had them prior to this. The new Corolla has 8 airbags. Today we have better fuel efficiency, collision protection, driver assistance, remote start... Even the seats are more comfortable. N…

But it's irrelevant when that's the cheapest new vehicle, most working Americans need a car, and despite better fuel efficiency, it isn't really that much cheaper to own a car. Hedonic adjustments make sense in theory, but in practice it's a loophole to make inflation whatever the government wants it to be. In the case of vehicles, they clearly went overboard. The counterargument to hedonic adjustments is that almost…