From Beckworth, via Retirement Blues, this graph showing similarity for five years or so.
From FRED, a longer view, showing what looks to me like lots of similarity:
Saturday, June 25, 2011
PCE and CPI (long term)
From Beckworth, via Retirement Blues, this graph showing similarity for five years or so.
From FRED, a longer view, showing what looks to me like lots of similarity:
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4 comments:
I had a ready reference to the Beckworth post in one of my links, and used it since it illustrated what David and I both wanted to show - that inflation is low and has been declining for three years. He is justifying the use of core inflation against an absurd and insipid complaint by Mark Calabria, a Catoite. (What would you expect?!?)
I just want to convince you that low and declining inflation is not a high and rising inflation problem, but your resistance is resolute.
PCE is an alternative measure of inflation. That it moves similarly (though not in lockstep) with core inflation is perfectly reasonable - maybe even an inflation expectation.
http://www.investopedia.com/terms/p/pce.asp#axzz1QOJ74Lq4
I really wasn't paying any attention to PCE until you pointed it out. Now, it's just one more indicator that my position is valid.
Thanks for the long range chart. I have repeatedly emphasized to Beckworth that he shouldn't draw conclusions from looking at short term moves in any variable.
Cheers!
JzB
"shouldn't draw conclusions from looking at short term moves in any variable."
agreed.
"inflation is low and has been declining for three years... I just want to convince you that low and declining inflation is not a high and rising inflation problem.."
I am perfectly willing to admit that inflation has been declining for THIRTY years.
I am used to thinking about the economy in terms of an approaching depression scenario, as opposed to being in the midst of one. I often still think in those terms, and this is sometimes a source of misunderstanding.
However, I don't think the problem is substantially different now that it has been since 1974. The "zero bound" problem that applies to interest rates also applies to inflation rates (except of course that DEflation is possible and DEterest is not).
I made a comment and got a 502 error ?!?
Anyway, every measurable since the 70's is different. Even stagnation is worse now.
Why won't you recognize that we have a substantially different problem, when every measurable is different?
Cheers!
JzB
Jazz, I think the difference is that you look at the problems in our economy as problems for people (which they are, of course) and I look at then as the economy's way to correct imbalances in the economy. Where I'm coming from is very different than where most people are coming from, in discussing such problems.
Finally found a discussion I think is relevant. A lot of comments, not all of them relevant, but it starts here.
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