Questions tagged [inflation]
Inflation is generalized increase of prices of goods and services in an economy, along with a corresponding fall in the purchasing value of money. The rate of inflation refers to the increase of the price of goods and services over time.
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How do economists compare information from different time periods?
Suppose we know how much someone earned over a 30 year period. We want to find out the average income over this time.
As a non economist, I am guessing that if we don't adjust these numbers because of ...
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Do economists prefer numbers over percentages?
Here is a question I have been wondering about.
Suppose I have data like GDP per Capita and Inflation for each month. I want to fit a econometric model to this data. Specifically, I want to see the ...
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Interest rates vs tariffs on inflation
I heard recently that tariffs don't increase inflation (from the Maxonomics YT channel.) The author's argument was (paraphrasing)
Inflation is the rise in price of all goods and services, not limited ...
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Value of the dollar 100 years ago -- was it very regional?
Many times you see multipliers like 20 or 30 to one for salaries during the depressions vs today. But are not such adjustments for inflation liable to be very off? I am asking if the value of the ...
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Can the GDP deflator between 1 year and the next tell us something useful about inflation in THAT year
I am looking at GDP data from India for Q1 of 2024-25 and Q1 of 2025-26. Using published Govt data on nominal and real GDP values, The GDP deflator works out at 1.780, and 1.797 for these 2 periods ...
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Does comparing currency expansion vs lifetime income directly tell us about wealth distribution?
For example, let's say the M2 currency expansion rate is stable at 5.5% per year (there's 5.5% more USD in circulation)
Now consider the income after taxes of an average someone, from all sources, ...
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Why does minimum wage seem to work better in developed countries than in developing ones?
In many developing countries, the minimum wage is not enough to cover basic living expenses. Meanwhile, in developed countries, people can at least survive on minimum wage, even if modestly. For ...
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CPI vs Inflation & compound effect of CPI on actual purchasing power
Ok, so I've been digging into CPI and inflation with reckless abandon recently and I've discovered a few things:
CPI is a measure of actual price change
Inflation is a measure of change in CPI (ie. ...
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Do central banks cut interest rates when they're confident? Why or why not?
I was reading the following article on Reuters:
SYDNEY (Reuters) -As businesses globally fret about sky-high U.S. tariffs reviving rampant inflation, in Australia, the redirection of cheap Chinese ...
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Is it fair to attribute the 2% inflation to being written into contracts?
Demand and supply shocks can put upwards or downwards pressure on inflation from its 2% target, but the 2% inflation itself: is it fair to attribute it to being written into various contracts and pay ...
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If a company's yearly profit growth is 3% percent, but inflation is also 3%, does the company stagnate?
The title basically tells it all. If a company's yearly profit growth equals general inflation that year, does it mean the company is stagnating?
Can we also generalize it to the whole economy? So, ...
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If deflation is bad, does that also mean technological advances that produce more goods are undesirable?
Apparently an economy that's experiencing deflation is an economy that's in trouble.
If so, does that mean technological advances that lead to more goods being produced is also bad? For example, ...
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How much of a role do wages play in interest rate adjustment?
I understand that inflation expectations influence consumer and firm decision-making, however I keep hearing that if people believe inflation with keep high/keep rising, they'll demand higher nominal ...
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Nominal GDP growth for the US Economy
In a recent post, somebody wrote:
Nominal GDP grows at a rate of something like 2 or 3% per year.
I think this is wrong and here is why. For the US, I would expect (real) GDP to grow at about 2% a ...
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influence of inflation on exchange rate
This is my observation:
If the inflation rate in country A is 12%, the value of goods increases by 12% each year in that country. At the same time, the same good in the US maintains a constant value. ...
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