Tyler has been defending his stagnation hypothesis with an intuitive argument about when the CPI is most skewed. I’m not 100% persuaded of Tyler’s intuition. There is a severe conceptual problem that plagues any measure of inflation. It seems easy enough to measure the change in price of a basket of goods, but real-life consumers [...]

Tags: Cowen, CPI bias, inflation, The Great Stagnation
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Arnold Kling tentatively postulates that central banks can, at most, select between a low-stable inflation regime and a high-variable inflation regime. Bryan Caplan proposes a quick test, which I hereby supply. Below are some scatterplots of inflation variance versus inflation means for 176 countries. The data is from the World Bank, which gets it from [...]

Tags: Caplan, IMF, inflation, Kling, monetary policy, World Bank
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