tag:blogger.com,1999:blog-2098432983500045934.post3066117358988789697..comments2024-03-12T22:19:32.339-04:00Comments on The New Arthurian Economics: By the numbersThe Arthurianhttp://www.blogger.com/profile/16501331051089400601noreply@blogger.comBlogger3125tag:blogger.com,1999:blog-2098432983500045934.post-59098179679168692942012-06-22T19:49:26.557-04:002012-06-22T19:49:26.557-04:00"The rate of inflation is also a flow.
Does t..."The rate of inflation is also a flow.<br />Does that make CPI a stock (of accumulated inflation?)"<br /><br />That's pretty interesting, actually.<br /><br />"The generalized form of the question is -- how do you inflation adjust a stock?"<br /><br />Exactly.The Arthurianhttps://www.blogger.com/profile/16501331051089400601noreply@blogger.comtag:blogger.com,1999:blog-2098432983500045934.post-20664212393438464272012-06-22T17:41:03.248-04:002012-06-22T17:41:03.248-04:00Thanks, Jazz. Comparison graph 4AM tomorrow.
1. I...Thanks, Jazz. Comparison graph 4AM tomorrow.<br /><br />1. I assume it is possible for inflation to "erode" debt (Krugman's term).<br /><br />2. By the standard inflation adjustment (as used for GDP) the real and nominal values are equal in the base year.<br /><br />3. However, for debt, if the real and nominal values are equal, THERE HAS BEEN NO EROSION OF DEBT.<br /><br />4. Therefore, the calculation that shows them to be equal must be wrong.The Arthurianhttps://www.blogger.com/profile/16501331051089400601noreply@blogger.comtag:blogger.com,1999:blog-2098432983500045934.post-50773467430194293932012-06-22T14:35:27.180-04:002012-06-22T14:35:27.180-04:00Let's see if I'm getting this.
Debt is a ...Let's see if I'm getting this.<br /><br />Debt is a stock.<br /><br />GDP is a flow.<br /><br />The rate of inflation is also a flow.<br /><br />Does that make CPI a stock (of accumulated inflation?) <br /><br />Then isn't GDP/CPI a flow/stock?<br /><br />Then Debt/CPI is a stock/stock?<br /><br />The generalized form of the question is -- how do you inflation adjust a stock?<br /><br />What you propose is to adjust each years addition to debt (a flow) by that years inflation rate (also a flow.)<br /><br />Then to get gross current debt, you total the adjusted debt values for all the years in the series.<br /><br />This has it's own internal logic. <br /><br />Have you done a comparison graph? Seems like maybe you did, but you post faster than I can read, so I'm not sure.<br /><br />My head is starting to hurt. I feel there may be a shifting reference in here somewhere.<br /><br />Cheers!<br />JzBJazzbumpahttps://www.blogger.com/profile/07337490817307473659noreply@blogger.com