eisenberg and housing economist Archives

Darn Deflation

By Econ70 | 01/15/2014

Deflation is bad for three reasons. First, by reducing GDP it raises debt to GDP ratios making it harder to service existing debt. Second, once consumers and businesses expect prices to be cheaper in the future, delaying purchases makes sense. Third, it reduces the tools available to central banks to fight recessions, the most powerful…

Deficient Data

By Econ70 | 10/21/2013

The CPI is based on 83,300 price quotes/month, but because the government was closed for 11 working days in October, the sample will be based on 40,000 price quotes. Because price quotes for some items are collected bi-annually, it will take six months for inflation data to fully recover from the small October sample. Worse,…