91–100 of 215 posts
The real world of PhD dissertations isn’t that different from that of economics textbooks.
As for the idea that oligopolies are behind inflation, it seems a cry too much the reverse of saying it's all Governments fault.
Wow, this was the article I was looking for, it summarizes a number of thoughts about economics that I'd been having since the undergraduate days: - There's an authority about the field that really isn't deserved. The models are not made properly, and there's a lot of hand-waiving. I studied economics with a class of engineers and everyone pointed this out. - The pop-sci version of economics is a bunch of easy quips.…
Yes and: This OC refers to the empirical data.
Friedman (et al) rejected empiricism. I was gobsmacked when I finally figured out what that meant. Like, wtf are they even arguing about if they reject reality?! (Ya, I am a slow learner.)
So agree or not with Nitzan's thesis, at least critics can have constructive debates about it.
Inflation is a change in the price level, i.e. an average. TFA argues that inflation is misleading because prices don't change uniformly, and therefore inflation doesn't fully explain every change in the price of every possible commodity and service. I think it's a straw man argument, because nobody claims that inflation fully explains changes in the prices of commodities. Instead, measuring inflation allows us to de…
I find that argument reasonably persuasive. His other point about inflation indices themselves being effectively useless, because of the inter price variability, I find less so. He skirts over the weightings which are key to the meaning of the index. They are weighted in such a way as to approximate the relative spending on each commodity. So the net effect of the index should be the inflation rate that you feel.
So average measures of inflation are valuable. The standard cures likely less so.
Wow, this was the article I was looking for, it summarizes a number of thoughts about economics that I'd been having since the undergraduate days: - There's an authority about the field that really isn't deserved. The models are not made properly, and there's a lot of hand-waiving. I studied economics with a class of engineers and everyone pointed this out. - The pop-sci version of economics is a bunch of easy quips.…
The thing that has nagged at you as it has me, is the simple fact that not only was “economics” conjured and molded by and for the interests of the upper echelon of society, to control the language and thoughts about its terms; but that at the core of it, it’s nothing more than fraud, deception, con artistry. That’s all inflation is too, fraud that if you would commit it, e.g., you added filler to some product you de…
All currency is made up. Even gold, or bitcoin, or giant rocks:
* https://en.wikipedia.org/wiki/Rai_stones
The only thing that has "inherent" value to humans is air/oxygen, shelter, water, and food. Everything else is psychological projection for convenience.
See The Power of Gold: The History of an Obsession by Bernstein:
* https://www.goodreads.com/book/show/249245.The_Power_of_Gold
* https://en.wikipedia.org/wiki/Peter_L._Bernstein
And Money: The True Story of a Made-Up Thing by Goldstein:
Earlier quoted context omitted.
I think you’re underestimating the impact of non-wage compensation, even for normal, middle class jobs. Your “pizza Fridays” is a pretty flippant way to describe things like health insurance, retirement benefits, etc. When you add up the share of income that goes to employees, total compensation growth keeps up with productivity growth. https://www.nber.org/digest/oct08/total-compensation-reflect...
The source you cite goes up to 2006 and related paper was published in 2008. Surely I don't have to point out the many changes that happened in the last 15 years. I could find a few papers past 2008 saying the exact opposite. I agree total comp is the better metric, but your source doesn't really do anything to dispel skepticism when many current day anecdotes lament the lack of secondary benefits beyond said Pizza F…
Even if total compensation was flat from 2006 to 2019, it would still be a radically different conclusion that what was drawn in the article.
The article says hourly wages only increase half of what productivity did by 2006. Yet total compensation increased equally.
Earlier quoted context omitted.
I find it interesting that house prices are kept out of inflation. But if you are forced to rent forever due to unaffordable housing, in your later years you might be paying $3000/m rent instead of $0/m mortgage interest. But that fact is conveniently left out.
37% of the 65% of homeowners own their home free & clear. That's 24%. You're obviously at a huge advantage if you're in this 24% - but it's kind of like saying that the top 10% of people have >$1M in assets (they also happen to predominantly be old).
Earlier quoted context omitted.
37% of the 65% of homeowners own their home free & clear. That's 24%. You're obviously at a huge advantage if you're in this 24% - but it's kind of like saying that the top 10% of people have >$1M in assets (they also happen to predominantly be old).
Surely the people who are leveraged with a fixed rate mortgage at an even bigger advantage to those who own a home outright? (debt will get inflated away over time)
But that is orthogonal. Both people in the comparison have the home equity to begin with. How? Either they paid $500k from earnings or they got it a lot cheaper in the past. A lot cheaper in the past == inflation.
What inflation doesn't necessarily do is capture how my grocery bill changes relative to my paycheck. If you look at the historical inflation rate, it does a semi-decent job of indicating when weird stuff happens. Wars tend to be accompanied by spikes in inflation. Things get scarce. Supply chains get disrupted. There's less stuff to be had so, on average, people can afford less stuff. Everybody is making the same salary but things cost more. Pandemics can have similar effects. (We just happen to have gone from one directly into the other.)
Deflation coincides with recessions (e.g. 1929). You'd think things getting cheaper would be indicate people can afford more stuff, but it's just the opposite. People are making less, so they buy less, and prices come down as supply exceeds demand.
Inflation does need the context of average earnings to be useful, but it is useful given that context.
Earlier quoted context omitted.
You need a model of all brains. I don’t care that tomatoes have doubled in price in 24 months because I can eat something else. But if all fruit and veg doubles then now we are talking inflation! I can no longer get a nutritional diet at the same cost. But my neighbour eats only McDonalds burgers and is largely unaffected. So I am not a matrix to apply to the vector. Maybe more like a neutal net.
You're a vector.