Chart of the Day: It Could Be Worse. A Lot Worse
In terms of inflation, the last 25 years since 1983 has been the most stable period in the last 200 years. CARPE DIEM
Professor Mark J. Perry's Blog for Economics and Finance
Wednesday, May 28, 2008
About Me
- Name: Mark J. Perry
- Location: Washington, D.C., United States
Dr. Mark J. Perry is a professor of economics and finance in the School of Management at the Flint campus of the University of Michigan. Perry holds two graduate degrees in economics (M.A. and Ph.D.) from George Mason University near Washington, D.C. In addition, he holds an MBA degree in finance from the Curtis L. Carlson School of Management at the University of Minnesota. In addition to a faculty appointment at the University of Michigan-Flint, Perry is also a visiting scholar at The American Enterprise Institute in Washington, D.C.
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6 Comments:
What year did they make the distinction between core inflation and the consumer price index, and is that reflected here? Wikipedia tells me 1975.
Stable inflation does not imply:
(1) Better times for consumers
(2) Better wealth distribution
(3) Increased opportunity
This chart compares apples and potatoes.
The recent period has been stable because of an unprecedented decrease in purchasing power, wealth segregation and less opportunity.
The issue is not inflation, the issue is people's perception of their own situation relative to some reference (their past, their parents, siblings, friends, etc.) If people think they are in good times then they have the experience of being in good times--whatever that means to the individual and regardless of what is really going on.
Too often it seems, perception is confused with reality.
Translations:
(1) Better times for consumers = Things are better for me!
(2) Better wealth distribution = I'm getting more money than my neighbor!
(3) Increased opportunity = I don't have to work as hard as I used to before to get business or a better paying job.
Translator:
I am sorry you live in such part of the world...
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