Juan E. Castañeda (Director) and Tim Congdon (Chairman) of the Institute for International Monetary Research at the University of Buckingham write today:
Category Archives: inflation
A Sugar High?
A lot of chatter about a sugar high coming from the passage of the American Rescue Plan, previous fiscal and monetary measures, combined with the increase in CPI inflation. Time to step back and assess.
Kevin Hassett Prediction: 7% y/y Inflation by December 2021
Remember this Kevin Hassett projection of Covid-19 deaths, from May 2020?
One Year Ahead Expected CPI Inflation Rates
Coming down for June, according to the University of Michigan survey of consumers.
Inflation: Three Event Studies
The surprise in inflation for the March, April, and May reference month releases induced respectively 2, 4, and 6 basis point upward moves in the 5 year inflation breakevens — hardly earthshaking.
Interpreting Inflation Rates for May
May CPI inflation surprised on the upside, with month-on-month 0.6% vs 0.4% (not annualized) Bloomberg consensus, year-on-year 5% vs 4.7%. Note that May’s 0.6% month-on-month is below April’s 0.8%, highlighting the decline in high-frequency inflation. We have the following readings on inflation (month-on-month):
Whose Consumer Price Index?
This post (an update of this) focuses on issue separate from the mathematics of the index formulation, and has to do with what the typical weights at any given instant in time should pertain to. Should one use the expenditure weights that pertain to all the households aggregated in the economy? Or should one use the expenditure weights that pertain to the “typical” household? Kokoski (2003) [updated link] summarizes the distinction thus:
CPI Skepticism
Every few years, skepticism of officially calculated inflation rates surges, so it seems a good idea to now recap how the CPI measures (and mis-measures) the cost of living, remembering that in the absence of knowledge of the “true” utility function of the “representative agent”, one can’t know the correct approach.
Sixty Years of Money, GDP and the Price Level
Looks like this:
One Year Ahead Inflation Expectations
and expectations for May…