I just realized, why consumer price index cannot possibly work as a measurement of inflation.
By definition, it is based on price of goods, that an average person buys, and weighted by the ammount.
Well, if chocolate goes to doubble price in an year, so I decide to stop buying it, the change in it's price does not even affect the inflation numbers, since it is now weighted at 0. Same goes for housing and energy. If I cannot possibly ever afford a house, guess what? The weight variable will go to shit too.
re: I just realized, why consumer price index cannot possibly work as a measurement of inflation.
re: I just realized, why consumer price index cannot possibly work as a measurement of inflation.
If I have some weird issues and get tested for a disease, and that disease is there for a while, but for whatever reason, it ends up killing me anyway, eventually I will be dead so the test is meaningless because it's no longer setting off alarm bells. That doesn't mean the test is useless or unimportant
@BlinkRape
I have seriously no idea what you're talking about. I just wrote, why it cannot measure anything of value. That doesn't mean, that there shouldn't be a warning mechanism, it means, that the warning mechanism is useless.
good luck with that, king