Click on image to enlarge.
This figure shows that the PPI for final demand tracks the CPI less shelter very closely. By both measures, inflation is now very much under control. The problem is that the CPI for shelter is up 5.6 percent, so the overall CPI looks quite hot.
Some would argue that leaving out shelter is misleading because shelter is such a large fraction of the typical household budget. On the other hand, the CPI for shelter is well known to be a lagging indicator of rents by virtue of how it is constructed, and other more current series show no recent inflation in rents. This latter argument puts me in the optimistic camp on inflation.
By the way, I recently made a bet with my friend Larry Ball that the overall CPI from February 2024 to February 2025 will rise by less than 2.5 percent. I am writing the bet here as a sort of contract. We will check back next year.
The bet is for $5. That is in nominal terms. So, in real terms, I get more if I win than Larry gets if he wins.
AI and the FDA
Dean Ball has an excellent survey of the AI landscape and policy that includes this: The speed of drug development...
Greg Mankiw’s Blog: Flier on RFK Jr
About Me Name: Greg Mankiw Location: United States I am the Robert M. Beren Professor of Economics at Harvard University....
Is it the phones?
Or perhaps we should just credit Sydney Sweeney? That is from Chris Said. The post Is it the phones? appeared...
Greg Mankiw’s Blog: Dear Committee Members
Like many who spend their lives in the ivory tower, I enjoy academic satires. That includes Richard Russo's novel Straight...
