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It’s mostly a demand shock, not a supply shock, and it’s everywhere

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Re: It’s mostly a demand shock, not a supply shock, and it’s everywhere

#101

Post by grayfaced »

Guthur wrote: post #96
RC_ITR wrote: post #85

Earlier quoted context omitted.

What everyone is going to have a real hard time wrapping their head around for the next few years: We built a highly efficient economy for a set of behaviors. A shock happened that caused a lot people to change their behaviors (probably for a long time, since they've had 2 years of 'practice'). Our economy, which was built for those old behaviors (living in cities, riding public transit, eating at restaurants, travel…

I just don't get why everyone maintains JIT manufacturing is bad, it's one of the many reasons we can have such reasonably low cost goods, its efficient.

Efficiency at a trade-off of resiliency. If you're talking about discretionary purchases, you probably value efficiency over resiliency. If you're talking agriculture, we should value resiliency over efficiency.

Re: It’s mostly a demand shock, not a supply shock, and it’s everywhere

#103

Post by xyzzyz »

jolux wrote: post #91

Just a warning that this is an article by a hedge fund expressing a view of our current inflationary period that I would argue is heterodox among the economic mainstream. I suggest reading Paul Krugman and Claudia Sahm for dovish views, or Adam Ozimek for a more critical view. In particular, the idea that “inflation expectations” can perpetuate inflation via a self-fulfilling prophecy effect has been called into ques…

What is most definitely a heterodox economic view is taking Paul Krugman seriously. He has fully become a newspaper opinion pundit, and very few people among academic economists pay much attention to him because of that.

Re: It’s mostly a demand shock, not a supply shock, and it’s everywhere

#104

Post by nbardy »

danhak wrote: post #90
skybrian wrote: post #51

Earlier quoted context omitted.

Keep in mind that CPI is an average based on what people actually pay, which often lags market rate. For housing, you might not pay market rate due to having bought a house long ago, or rent control, or some other way of getting a sweetheart deal.

That is a really good point. I also have a pet theory that CPI understates the cost of housing due to people who are pushed out of entering the market altogether (e.g. homelessness rising, people living with parents longer) Sort of the same way some people say unemployment figures understate the true number by ignoring discouraged workers / people who have stopped looking altogether. I have a hunch there are many dis…

You should take a look at Pia Maloney and Eric Weinstein work.

CPI is broken because it doesn't factor in a "change in taste or prefence"

CPI treats individuals as a giant unmovimg population mean.

To counter they change to use vector fields.

Re: It’s mostly a demand shock, not a supply shock, and it’s everywhere

#105

Post by human »

yokem55 wrote: post #88
hammock wrote: post #56

Earlier quoted context omitted.

Housing is not in CPI. They use "owners' equivalent rent" which is a subjective (cooked) metric.

So what housing cost metric should be looked at? The cost for a retiree living in their paid off home? The mortgage payment for brand new homeowner with minimal down? The cost to split an apartment for 2 people? What objective measure should be used?

CPI will never been perfect. They could even break it down into 3 categories: 1. Poor man’s CPI: ramen, rent & public transit 2. Middle class’s CPI: house, beef & cars 3. Rich man’s CPI: penthouse, luxury goods & sports teams

Re: It’s mostly a demand shock, not a supply shock, and it’s everywhere

#106

Post by asdff »

ClumsyPilot wrote: post #67
surrealize wrote: post #37

Demand growth is what we want. Our economy has been largely demand-limited for a while. Demand growth boosts GDP growth. Corporations are sitting on huge piles of cash, so they're not investment-limited. Any labor market tightness raises wages, which have been mostly stagnant for a long time (until very recently). Wage growth is also good. If wage growth squeezes profits, then that's also good from a wealth inequalit…

Corporations and capital class had huge piles if cash, that douubled while real Economy stuttered during the pandemic. Noone is talking about the fact that share price and real estate is inflating. But for once there is pressure on wages, and suddenly people are running for the hills

5 year SPY chart is hillarious. Covid was seemingly a blip only a tad bigger than the blip in december 2018, we've been right back into the bull market trend for like a year now. The positive slope from march 20 2020 alone to today has just been insane, just a straight line up with hardly any deviation. So amazingly bullish. Fear doesn't exist in the markets anymore, we've seemed to have abandoned it. Just buy your leaps and profit indefinitely until the end of time. Not even a global pandemic could tear it down as it were.

Re: It’s mostly a demand shock, not a supply shock, and it’s everywhere

#107

Post by [deleted] »

xyzzyz wrote: post #103
jolux wrote: post #91

Just a warning that this is an article by a hedge fund expressing a view of our current inflationary period that I would argue is heterodox among the economic mainstream. I suggest reading Paul Krugman and Claudia Sahm for dovish views, or Adam Ozimek for a more critical view. In particular, the idea that “inflation expectations” can perpetuate inflation via a self-fulfilling prophecy effect has been called into ques…

What is most definitely a heterodox economic view is taking Paul Krugman seriously. He has fully become a newspaper opinion pundit, and very few people among academic economists pay much attention to him because of that.

[deleted]

Re: It’s mostly a demand shock, not a supply shock, and it’s everywhere

#108

Post by Robotbeat »

clavicat wrote: post #92
Robotbeat wrote: post #79

Earlier quoted context omitted.

Is it? Can’t game it much or for long without being obvious because it’s compounding. Let’s say inflation is understated by 4% absolute per year. Over 40 years, that’s a factor of 4. https://inflationdata.com/articles/inflation-adjusted-prices... Is the fuel cost per mile traveled 4 times higher than it was in 1981? No. Fuel prices adjusted for CPI are about identical with what they were in 1981 ($3.80/gallon): https…

Fuel would be hard to game. It’s just fuel. Other components are trickier to calculate, like aggregate food prices or things involving hedonic regression. If there is gaming, you’d have to look at the tricky parts.

Well if you don’t think we’ve gamed fuel but do think we’ve gamed CPI significantly (ie several percentage points per year for decades), then we have made REMARKABLE progress in reducing fuel costs over the last 40 years, with fuel efficiency improvements on top of that.

Re: It’s mostly a demand shock, not a supply shock, and it’s everywhere

#109

Post by asdff »

airstrike wrote: post #2

For anyone else thrown off by the use of "MP3" to refer to anything other than the file format, here's https://medium.com/alpha-beta-blog/the-three-stages-of-monet...

Nitpick but nothing grinds my gears more than people using niche acronyms without first defining them in long form, especially when its something like MP3 that's going to give you a million hits of the wrong result when you try and search for a definition.

Re: It’s mostly a demand shock, not a supply shock, and it’s everywhere

#110

Post by jnwatson »

RC_ITR wrote: post #85
arthur5005 wrote: post #68

What this doesn’t really address is the why? Yeah there’s more money floating around, so perhaps more people want to spend it, but why? Most people aren’t getting materially more stuff or even need that much more stuff, consumption’s already god damn conspicuous. Maybe everyone can afford a jet ski all of a sudden? No, the stims didn’t really do /that/ kind of wealth expansion. To me, this still looks like the bullwh…

What everyone is going to have a real hard time wrapping their head around for the next few years: We built a highly efficient economy for a set of behaviors. A shock happened that caused a lot people to change their behaviors (probably for a long time, since they've had 2 years of 'practice'). Our economy, which was built for those old behaviors (living in cities, riding public transit, eating at restaurants, travel…

Turo* is AirBnb for cars. I’ve used it a few times and it worked well.

* http://www.turo.com

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