Pondering The Economic Significance Of Aggregated Price Indices
bondeconomics.substack.com
Blair Fix wrote an interesting article “The Truth About Inflation.” There is a lot of material in there, which overlaps some of my thinking that would go into a section of my inflation primer. One key observation is that variance in price changes for individual items swamps the change in the aggregate CPI. I ran into a comment that “everybody knows” about variance in CPI components, but this points to the problem that conventional approaches to macro have a theoretical blind spot — what if aggregate CPI is not economically meaningful because we are literally and figuratively adding up apples and oranges?
Pondering The Economic Significance Of Aggregated Price Indices
Pondering The Economic Significance Of…
Pondering The Economic Significance Of Aggregated Price Indices
Blair Fix wrote an interesting article “The Truth About Inflation.” There is a lot of material in there, which overlaps some of my thinking that would go into a section of my inflation primer. One key observation is that variance in price changes for individual items swamps the change in the aggregate CPI. I ran into a comment that “everybody knows” about variance in CPI components, but this points to the problem that conventional approaches to macro have a theoretical blind spot — what if aggregate CPI is not economically meaningful because we are literally and figuratively adding up apples and oranges?