Topic: Inflation supports economic growth. Prove otherwise in this thread! (Read 4529 times)

Quote from: molecular on July 11, 2014, 12:33:19 AM

Quote from: Ibian on July 12, 2014, 03:42:45 AM

It just occurred to me that something very important is missing from this thread.

Define economic growth.

Excellent point.

Also: define inflation (there's monetary inflation and price inflation)

Growth is usually measured by GDP

And inflation measured by CPI and PPI

Correct GDP for inflation. What do the last hundred years look like? Also compare purchasing power of the average household, also corrected for inflation.

The GDP numbers would show slower growth, but it would still show growth. Purchasing power has also increased, although the amount of the increase would be underreported as our standard of living has increased a lot.

The average house used to cost two yearly salaries. This is no longer the case. Same for most other stuff.

As for re: academics: nobody who care about their personal financial future takes them seriously. Look at what is, not what you are told there is.

This brings up another point: yearly salaries. Things have changed a lot with a lot of households moving from having a single earner to two. Not only do houses often cost more than 2 yearly salaries, they often cost more than 4 yearly person-salaries.

I think houses have also gotten bigger in the process.

Who would have thought that if the average house was bigger that the average house would be more expensive?

CoinsCoinsEverywhere

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Quote from: Harley997 on July 11, 2014, 07:12:32 PM

Quote from: molecular on July 11, 2014, 12:33:19 AM

Quote from: twiifm on July 11, 2014, 11:37:56 AM

It just occurred to me that something very important is missing from this thread.

Define economic growth.

Excellent point.

Also: define inflation (there's monetary inflation and price inflation)

Growth is usually measured by GDP

And inflation measured by CPI and PPI

Correct GDP for inflation. What do the last hundred years look like? Also compare purchasing power of the average household, also corrected for inflation.

The GDP numbers would show slower growth, but it would still show growth. Purchasing power has also increased, although the amount of the increase would be underreported as our standard of living has increased a lot.

The average house used to cost two yearly salaries. This is no longer the case. Same for most other stuff.

As for re: academics: nobody who care about their personal financial future takes them seriously. Look at what is, not what you are told there is.

This brings up another point: yearly salaries. Things have changed a lot with a lot of households moving from having a single earner to two. Not only do houses often cost more than 2 yearly salaries, they often cost more than 4 yearly person-salaries.

CoinDiver

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yeah right I googled that and I found no such thing except one smarmy article that doesn't debunk anything. Its just an ad hominem article. Different schools of economics debate each other all the time but post-Keynsian are still from academia and someone like Minksy is getting very influential now that his work theorize why crisis occurs.

Gravity & round earth are also accepted by academia. You know whats NOT? shadowstats & Stefan Molyneux & Rothbard. They're considered fringe (as in lunatic)

I guess you don't understand Occum's Razor either.

My general theory in life is don't trust those who benefit more from lying than being honest. You assume the fed can be trusted. You assume if it's mainstream it must be correct, and if it's fringe it must be wrong. The theory that the FED is operating for their own good does not make those ludicrous assumptions. It is only based on the assumption that a man tries to survive as best as possible. Please review Occam's Razor (and spell it right).

Harley997

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Quote from: Ibian on July 12, 2014, 03:42:45 AM

Quote from: Harley997 on July 11, 2014, 07:12:32 PM

Quote from: molecular on July 11, 2014, 12:33:19 AM

Quote from: Erdogan on July 12, 2014, 08:58:25 AM

It just occurred to me that something very important is missing from this thread.

Define economic growth.

Excellent point.

Also: define inflation (there's monetary inflation and price inflation)

Growth is usually measured by GDP

And inflation measured by CPI and PPI

Correct GDP for inflation. What do the last hundred years look like? Also compare purchasing power of the average household, also corrected for inflation.

The GDP numbers would show slower growth, but it would still show growth. Purchasing power has also increased, although the amount of the increase would be underreported as our standard of living has increased a lot.

The average house used to cost two yearly salaries. This is no longer the case. Same for most other stuff.

As for re: academics: nobody who care about their personal financial future takes them seriously. Look at what is, not what you are told there is.

The prices of houses have increased in terms of annual salary, however interest rates have decreased dramatically so total housing costs have decreased, plus houses tend to be bigger today then they were in the past so you have a lower housing cost for a bigger house.

trader001

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There is a man behind the curtain.

And the man realize he is slowly losing control of everything he hold dear.

Erdogan

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There is a man behind the curtain.

Miz4r

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Inflation supports debt growth, which gives the illusion of economic growth but in reality it sucks the wealth out of the poor and middle class and gives it to the rich who put their wealth in assets and loans to the poor who pay them interest. It's a vicious cycle, but it goes so slowly that not many people actually notice what's going on until it's too late. Like a frog sitting in water that slowly heats up and starts to boil.

Inflation and deflation, if happening naturally, would just be an equilibrium finder for the market. It should not be an instrument or requirement for economic growth.

Ibian

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Quote from: Harley997 on July 11, 2014, 07:12:32 PM

Quote from: molecular on July 11, 2014, 12:33:19 AM

Quote from: Este Nuno on July 11, 2014, 09:34:22 AM

It just occurred to me that something very important is missing from this thread.

Define economic growth.

Excellent point.

Also: define inflation (there's monetary inflation and price inflation)

Growth is usually measured by GDP

And inflation measured by CPI and PPI

Correct GDP for inflation. What do the last hundred years look like? Also compare purchasing power of the average household, also corrected for inflation.

The GDP numbers would show slower growth, but it would still show growth. Purchasing power has also increased, although the amount of the increase would be underreported as our standard of living has increased a lot.

The average house used to cost two yearly salaries. This is no longer the case. Same for most other stuff.

As for re: academics: nobody who care about their personal financial future takes them seriously. Look at what is, not what you are told there is.

GangkisKhan

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Quote from: molecular on July 11, 2014, 12:33:19 AM

It just occurred to me that something very important is missing from this thread.

Define economic growth.

Excellent point.

Also: define inflation (there's monetary inflation and price inflation)

Growth is usually measured by GDP

And inflation measured by CPI and PPI

How reliable do people here think those numbers are? The ones used by academic economists.

Measuring anything isn't really that simple. On top of it, government official has the tendency to make themselves look good by publishing good number.

Harley997

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Quote from: molecular on July 11, 2014, 12:33:19 AM

Quote from: Erdogan on July 11, 2014, 11:48:39 AM

It just occurred to me that something very important is missing from this thread.

Define economic growth.

Excellent point.

Also: define inflation (there's monetary inflation and price inflation)

Growth is usually measured by GDP

And inflation measured by CPI and PPI

Correct GDP for inflation. What do the last hundred years look like? Also compare purchasing power of the average household, also corrected for inflation.

The GDP numbers would show slower growth, but it would still show growth. Purchasing power has also increased, although the amount of the increase would be underreported as our standard of living has increased a lot.

twiifm

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Quote from: twiifm on July 10, 2014, 11:09:25 PM

Quote from: Erdogan on July 10, 2014, 10:13:19 PM

The current consumer price index preferred by the Fed as the most relevant, is wrong, because it excludes products essential to consumers and is a large part of the total consumption. Food and energy - that must be close to half of the consumption for many consumers.

Say what? Did you even read that article I posted?

http://www.bls.gov/opub/mlr/2008/08/art1full.pdf

Does it matter. Well here is a proof: The government supplies several different indexes for consumer prices. At best, only one can describe the general consumer price level. Plus, the indexes are tuned, so at one time is defined in one way, another time it is defined another way. So there can be no accurate index.

What there can be, is a number called CPI, measured at one of the specified methods. That number can be interesting to look at, that is why they make it.

Still, the general price level for consumer prices can fundamentally not be measured. I do not think the Serious Economist disagrees on this, it is more a consideration of how important it is.

Anyway, how do they ask to find the component parameters? Do they ask someone in the rockies what he sold his horse to his neighbour for? Why not? Why would anyone care, are horses in the CPI?

According to that article they poll a basket of goods. And log the statistics based on that polling. The basket of goods is chosen to represent a cross section of consumer goods from different regions . There is a CPI-U and CPI-W to reflect the different lifestyles of urban vs non-urban dwellers. Its similar to how the Census Bureau poll data

Just read the article. Its pretty interesting

Erdogan

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Quote from: twiifm on July 10, 2014, 11:09:25 PM

Quote from: Erdogan on July 10, 2014, 10:13:19 PM

The current consumer price index preferred by the Fed as the most relevant, is wrong, because it excludes products essential to consumers and is a large part of the total consumption. Food and energy - that must be close to half of the consumption for many consumers.

Say what? Did you even read that article I posted?

http://www.bls.gov/opub/mlr/2008/08/art1full.pdf

Does it matter. Well here is a proof: The government supplies several different indexes for consumer prices. At best, only one can describe the general consumer price level. Plus, the indexes are tuned, so at one time is defined in one way, another time it is defined another way. So there can be no accurate index.

What there can be, is a number called CPI, measured at one of the specified methods. That number can be interesting to look at, that is why they make it.

Still, the general price level for consumer prices can fundamentally not be measured. I do not think the Serious Economist disagrees on this, it is more a consideration of how important it is.

Anyway, how do they ask to find the component parameters? Do they ask someone in the rockies what he sold his horse to his neighbour for? Why not? Why would anyone care, are horses in the CPI?

twiifm

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Quote from: CoinDiver on July 11, 2014, 09:36:03 AM

Quote from: twiifm on July 10, 2014, 03:22:43 PM

Quote from: CoinDiver on July 10, 2014, 01:46:20 PM

Quote from: Erdogan on July 10, 2014, 01:40:21 PM

Quote from: twiifm on July 09, 2014, 06:37:15 PM

Really shadowstats? Thats where you got your numbers from? Oh lord Roll Eyes

You forgot to insert an argument.

He doesn't have one. He seems to regurgitate talking points from MSNBC, and has little understanding.

Ha ha wrong. I don't follow mainstream economics. I follow heterodox economics & MMT. No need for me to argue shadowstats. Just google "shadowsats debunked" and you will find many examples of why its shit

I googled "heterodox economics debunked"... that what you said right? Came up with "a heterodox economist nowadays could be defined as ‘somebody who aims for cheap applause from economically illiterate Guardian readers’"

What should we google next? "Gravity debunked", "round earth debunked"?

Occam's razor says the central bank has both the incentive and the power to skew inflation figures.

yeah right I googled that and I found no such thing except one smarmy article that doesn't debunk anything. Its just an ad hominem article. Different schools of economics debate each other all the time but post-Keynsian are still from academia and someone like Minksy is getting very influential now that his work theorize why crisis occurs.

Gravity & round earth are also accepted by academia. You know whats NOT? shadowstats & Stefan Molyneux & Rothbard. They're considered fringe (as in lunatic)

I guess you don't understand Occum's Razor either.

CoinDiver

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Quote from: twiifm on July 10, 2014, 03:22:43 PM

Quote from: CoinDiver on July 10, 2014, 01:46:20 PM

Quote from: Erdogan on July 10, 2014, 01:40:21 PM

Quote from: twiifm on July 09, 2014, 06:37:15 PM

Really shadowstats? Thats where you got your numbers from? Oh lord Roll Eyes

You forgot to insert an argument.

He doesn't have one. He seems to regurgitate talking points from MSNBC, and has little understanding.

Ha ha wrong. I don't follow mainstream economics. I follow heterodox economics & MMT. No need for me to argue shadowstats. Just google "shadowsats debunked" and you will find many examples of why its shit

I googled "heterodox economics debunked"... that what you said right? Came up with "a heterodox economist nowadays could be defined as ‘somebody who aims for cheap applause from economically illiterate Guardian readers’"

What should we google next? "Gravity debunked", "round earth debunked"?

Occam's razor says the central bank has both the incentive and the power to skew inflation figures.

Este Nuno

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amarha

Quote from: molecular on July 11, 2014, 12:33:19 AM

It just occurred to me that something very important is missing from this thread.

Define economic growth.

Excellent point.

Also: define inflation (there's monetary inflation and price inflation)

Growth is usually measured by GDP

And inflation measured by CPI and PPI

How reliable do people here think those numbers are? The ones used by academic economists.

Ibian

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Activity: 2268

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Quote from: molecular on July 11, 2014, 12:33:19 AM

Quote from: molecular on July 11, 2014, 12:33:19 AM

It just occurred to me that something very important is missing from this thread.

Define economic growth.

Excellent point.

Also: define inflation (there's monetary inflation and price inflation)

Growth is usually measured by GDP

And inflation measured by CPI and PPI

Correct GDP for inflation. What do the last hundred years look like? Also compare purchasing power of the average household, also corrected for inflation.

twiifm

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Activity: 784

Merit: 500

It just occurred to me that something very important is missing from this thread.

Define economic growth.

Excellent point.

Also: define inflation (there's monetary inflation and price inflation)

Growth is usually measured by GDP

And inflation measured by CPI and PPI

molecular

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Merit: 1019