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JakeS:
the real inflation is whatever the inflation is
That begs the question of that "inflation" is. And most definitions of inflation are circular or "fudge-factor" definitions, where all we have is a disparate collection of price and volume series and it's by no means clear that there is an index that captures it.

By laying out pros and cons we risk inducing people to join the debate, and losing control of a process that only we fully understand. - Alan Greenspan
by Migeru (migeru at eurotrib dot com) on Tue May 25th, 2010 at 04:16:41 AM EST
[ Parent ]
Yes, discounting - of which inflation is a sub-field - is inherently political.

But my point is that "core inflation" isn't an attempt to arrive at a meaningful discount rate: It is an attempt to divine the expected discount rate of fixprice market participants.

- Jake

Friends come and go. Enemies accumulate.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Tue May 25th, 2010 at 06:39:03 AM EST
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