Monday, October 01, 2007

No Price Inflation-If You Exclude Prices That Rise

Daniel Gross has a surprisingly good column for being published in a outlet as big as Newsweek. Normally, only The Economist among mayor news magazines publishes columns this good.

In it he mocks the "core" inflation concept as well as Alan Greenspan and also points out that price inflation is likely to rise fast.

For my own general critique of "core" inflation see here. For my critique of an argument I heard after writing that article, namely that "core" inflation allegedly better reflect inflation trends and because of that helps predict all-items inflation see here ( In reality as I demonstrate in the post, the empirical relationship existing works in the opposite way so that movements in all-items inflation predict movements in "core" inflation).


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