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Today's equivalent of the 20" CRT is a 20" CRT, or at the very least a 20" TV. If that now costs $500, that means that the inflation rate was negative (or at least the TV's contribution to inflation was).

I don't know if inflation calculations were the problem in Canada, I'm just pointing out that it's one possible way.

Incidentally, there is a completely non-subjective way to calculate inflation: choose a fixed basket of goods. I.e., look at what someone in 1970 actually purchased, and then look today at what those goods/services [1] cost today. The only problem with this is that to calculate inflation from 1980 to today, you need to pick a 1980's basket rather than a 1970's basket, i.e. CPI stops being a single quantity you can push forward and backward in time.

[1] Also, don't choose categories of goods like health care - choose actual goods like appendix removal or aspirin.



"Incidentally, there is a completely non-subjective way to calculate inflation: choose a fixed basket of goods."

That 'choose' part is subjective. http://www.bls.gov/cpi/ (stress added):

"The Consumer Price Indexes (CPI) program produces monthly data on changes in the prices paid by urban consumers for _a_ representative basket of goods and services"

Your 'or at the very least a 20" TV' acknowledges that, too. How do you objectively choose between the two?

Similarly, "like appendix removal or aspirin": who determines that "aspirin" is the actual good, and not "pain killing" or "prevention of strokes"?




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