“There’s this wild disconnect between what people are experiencing and what economists are experiencing,” says Nikki Cimino, a recruiter in Denver.
“There’s this wild disconnect between what people are experiencing and what economists are experiencing,” says Nikki Cimino, a recruiter in Denver.
Consider the possibility that, first and given the political importance they have in the present day, the official numbers that the Economists are using are less than honest.
Also, I know that some countries don’t include Housing Inflation - which is huge* - in their Official Inflation. Is that also the case in the US?
Last but not least, there is the whole difference between what is usually reported to us by Politicians, Economists and the Press, which is either country totals (which grow up merelly by the population growing) or the mean average (i.e. adding all values and dividing by the total number of points) which suffers from the “if a man has 10 chickens and 9 others have none, each has in average 1 chicken even though most have none” problem, and the mode (the value around which most cases are found) which is far more representative of most people’s experiences: if for example the wealth increases from higher productivity are going entirelly to a few people who just get ever more filthy rich whilst the many have either stagnated or, worse, are getting a bit poorer due to inflation eating up the true value of their pay, the grand total will be growing, as will the average (if the population numbers are steady) but the mode will have stagnated or even be falling, matching the experience of most people - people get to hear about country GDP growing and even GPD-per-capita growing all the while the vast majority see not growth at all, maybe even a falling of their purchasing power (the latter for sure for any who don’t already own their house).
Been arguing for years that the Mode is far more representative of the common person’s experience than Mean or Median. Most ppl don’t remember that Mode even exists.
All three should be reported, along with raw data. Maybe it’s available somewhere, I haven’t looked.
I’ve never understood why median is a useful metric.
Apparently inflation went down bigly in the 1980s when they decided to stop counting the cost of housing. NPR last week had a report about people advocating to put that back in so that we can have a better idea of what is going on.
Well, the official Inflation is used in the calculation of the official GDP were it acts as a deflator (i.e. the more the inflation the less the GDP) to correct the Nominal GDP (which is in present day currency terms) to make the Real GDP (which is supposedly free of Inflation and hence comparable between years) aka the Official GDP.
If the official Inflation understates the real Inflation, what happens is that the increase is the Nominal GDP that comes merelly from inflation rather than from any actual growth in wealth, is not fully offset when the Real/Official GDP is calculated, so the resulting “real” GDP number is bigger than reality and proud government politicians can come out, compare it to last years’s GDP (which it should’ve been comparable with, if both were done properly) and claim that it was their steering of the Economy that made such a difference to last year’s GDP, i.e such high GDP Growth.
Hence the is massive political pressure to understate Inflation, i.e. to lie, so that ultimatelly larger GDP Growth figures can be posted and boasted about.