• Nov 06, 2022
• CONV

  Upload Media

  ×

  Insert Reset Close
  What goes into inflation numbers? Something people have been looking at now - Didn't have to be accurate with it before
  
  Krugman's recent EconEd 2022 lecture
  
  Some things are clearly just volatile prices, and some had been included in core inflation.
  
  If you exclude food and energy, or if you exclude extreme movements, what you basically end up with is housing. Housing is core inflation, 40% of core CPI.
  
  Rent is a lagging indicator. Leases. It can lag way behind when there are big shifts.
  
  Krugman says inflation is 4-7%. Probably 5%.
  
  Inflation expectations for this year are high, but for a few years ahead they're more stable. So an overheated economy. People talk about a coming plunge in inflation.
  
  ‘We have enough policy credibility this time that the public has not updated its expectations of future inflation based on recent inflation.’ (As opposed to what had to be done in the 70s, ie create a big unemployment rate, because everyone expected 10% inflation in perpetuity.)
  
  Inflation depends both upon unemployment and expected inflation.
  
  China shipping costs were crazy and are now down almost to pre-pandemic. Supply chain issues have been fading away. Rents on realtor.com appear to have peaked.
  Update
  • b
  • i
  • #
  • rtf

  Update Post

  ×

  What goes into inflation numbers? Something people have been looking at now - Didn't have to be accurate with it before<br><br>Krugman's recent EconEd 2022 lecture<br><br>Some things are clearly just volatile prices, and some had been included in core inflation.<br><br>If you exclude food and energy, or if you exclude extreme movements, what you basically end up with is housing. Housing is core inflation, 40% of core CPI. <br><br>Rent is a lagging indicator. Leases. It can lag way behind when there are big shifts. <br><br>Krugman says inflation is 4-7%. Probably 5%. <br><br>Inflation expectations for this year are high, but for a few years ahead they're more stable. So an overheated economy. People talk about a coming plunge in inflation. <br><br>‘We have enough policy credibility this time that the public has not updated its expectations of future inflation based on recent inflation.’ (As opposed to what had to be done in the 70s, ie create a big unemployment rate, because everyone expected 10% inflation in perpetuity.)<br><br>Inflation depends both upon unemployment and expected inflation. <br><br>China shipping costs were crazy and are now down almost to pre-pandemic. Supply chain issues have been fading away. Rents on realtor.com appear to have peaked.

  What goes into inflation numbers? Something people have been looking at now - Didn't have to be accurate with it before
  
  Krugman's recent EconEd 2022 lecture
  
  Some things are clearly just volatile prices, and some had been included in core inflation.
  
  If you exclude food and energy, or if you exclude extreme movements, what you basically end up with is housing. Housing is core inflation, 40% of core CPI.
  
  Rent is a lagging indicator. Leases. It can lag way behind when there are big shifts.
  
  Krugman says inflation is 4-7%. Probably 5%.
  
  Inflation expectations for this year are high, but for a few years ahead they're more stable. So an overheated economy. People talk about a coming plunge in inflation.
  
  ‘We have enough policy credibility this time that the public has not updated its expectations of future inflation based on recent inflation.’ (As opposed to what had to be done in the 70s, ie create a big unemployment rate, because everyone expected 10% inflation in perpetuity.)
  
  Inflation depends both upon unemployment and expected inflation.
  
  China shipping costs were crazy and are now down almost to pre-pandemic. Supply chain issues have been fading away. Rents on realtor.com appear to have peaked.

  Close Save changes

Show More

Show Less