The central bank is raising rates to fight inflation. No one else seems willing to help

  • EhForumUserEnglish
    11·
    1 year ago

    It’s supposed to measure the cost of consumer goods

    Because consumables are what are frequently purchased to be able to observe inflation taking place.

    It wouldn’t make sense to track houses, for example. People only buy those once, maybe twice in their life. You would have no idea how their perception of the value of the dollar is changing watching that.

    • Kecessa@sh.itjust.worksEnglish
      1·
      1 year ago

      But it doesn’t make sense to change the basket from having 7 portions of meat to having 3 portions of meat and 4 portions of tofu (example pulled out of my ass, but the principle is the same as what’s being done). That’s what people do because of inflation to reduce their spendings, it still means that the number reported has nothing to do with real inflation.

      Real inflation/deflation is the variation of price of specific items over time. You could absolutely check inflation of housing by comparing the price of thousands of houses that respect some criterias over time without changing the criterias.