Krugman: Always Inflation Somewhere

[steve2470]

http://krugman.blogs.nytimes.com/2014/07/19/always-inflation-somewhere/?smid=tw-NytimesKrugman&seid=auto



Whenever you point out that the hyperinflation the usual suspects have been predicting for the past 6 years hasn’t materialized, you get a rash of comments declaring that yes it has, the government is just lying about the statistics. One answer — aside from come on, how do you think that works? — is that independent measures, like the Billion Price Index, aren’t very different from the official index. Still, people will point to the price of something that has gone up as evidence that we have lots of inflation.

Not that I think such people can be budged, but it is important to realize that relative prices are always shifting around, and that some prices inevitably go up more than the average. As the figure shows, if you go back to the beginning of the Great Recession, food prices have risen more than the overall CPI (although hyperinflation it isn’t), but car prices have risen more slowly (and high-tech stuff has, of course, gotten much cheaper).

And what about Shadowstats, which claims that inflation is much higher than the government lets on? A subscription costs $175 — the same as 8 years ago.