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re: Grocery inflation
Posted on 4/5/24 at 4:24 pm to BuckyCheese
Posted on 4/5/24 at 4:24 pm to BuckyCheese
quote:
Yes, I understand perfectly well why food is not included in the monthly inflation numbers.
I don’t. Learn me. Why shouldn’t monthly inflation numbers actually reflect what people are spending their money on?
This post was edited on 4/5/24 at 4:26 pm
2
Posted on 4/5/24 at 4:59 pm to Indefatigable
quote:
I don’t. Learn me. Why shouldn’t monthly inflation numbers actually reflect what people are spending their money on?
Most grocery items are commodities which can have large, rapid, price swings in both directions. Including them in the monthly inflation numbers would result in wildly variable numbers that would have little use in gauging the economy.
If beef spikes up 20% due to a disease scare and then drops back down to normal the following month it would give an inaccurate reading of the economy.
There is a very obvious trend which should be included in the numbers however. I'm sure some statisticians could figure out how to add the trend but they refuse to.
Economists look at more than a single chart anyway.
Posted on 4/5/24 at 5:53 pm to Indefatigable
quote:
I don’t. Learn me. Why shouldn’t monthly inflation numbers actually reflect what people are spending their money on?
Caveat: This is an extreme oversimplification of a complicated process, but:
Russian economist A. A. Konüs figured it was more accurate to change from Cost of Goods (COGI) to Cost of Living (COLI).
COGI tracked prices of things everyone bought (milk, eggs, etc.). However Konüs figured that people would just stop buying milk, eggs, etc. if they got too expensive so we moved to COLI.
So yeah, we basically changed it because a communist economist in the 1920s-1930s said that it should be changed because people just won’t buy stuff if it’s expensive.
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