adebar OP t1_iznj4f8 wrote

The factors you point out definitely have a balancing influence. However, you have different consumption baskets, some countries import more of their energy/oil or goods in general. To your point: the European countries are more homogenous.

These are the countries that OECD tracks. It's interesting to see the differences between say Germany and Frace or outliers like Greece or Switzerland.


adebar OP t1_izne5ys wrote

It's a close tie between the Argies and Turkey. Both are in the OECD dataset but I removed them from the chart because it detracts from a meaningful comparison between the other countries. Also, if you try to fit the range of the colour scale to include their values, the rest is just a uniform sea of green. :-)


adebar t1_ixcukox wrote

I'm getting it more than you realise. The index values (that's the technical term) are in fact totally arbitrary. All the information is in the relative changes. Once you have those, you can arbitrarily rebase. In fact the indices are regularly rebased (current one has 1982-84 = 100). There are series with other bases which are still published by the BLS because other bases are referenced in contracts.

Every announcement of CPI quotes the changes in percentage points. Take the BLS word for it, not mine: "Calculating Index Changes: Movements of the indexes from 1 month to another are usually expressed as percent changes rather than changes in index points, because index point changes are affected by the level of the index in relation to its base period, while percent changes are not."


adebar t1_ixaibj2 wrote

Look, there's a fair amount of established economic theory around inflation, how the numbers are usually presented and what they mean.

It's highly misleading to say that a dollar devalued by 20 cents in 2022 because precisely only a 1989 dollar devalued 20 cents. A 2021 dollar devalued 9 cents and a 1960 dollar probably devalued 50 cents. See how bothersome this is? That's why people refer to the changes in per cent and not absolute terms.


adebar t1_ixag63i wrote

Yes, and kudos for having the grit to finish your chart and the guts to post it here. You will have a more meaningful understanding if you think about inflation/purchasing power changes in relative terms. Your 1960s dollars probably devalued by 50 cents in the last year. :-)


adebar t1_ixafmrq wrote

OK, I see what you are getting at. But consider this: your 2021 money is devaluing by 21 cents on a $2.19 basis. This is a relative (~9%; there are significant rounding errors) devaluation by approximately 9%. It's meaningless to look at absolute devaluation if the basis is changing from $1 to $2.19 from 1989 to 2021. You are comparing 1989 apples to 2021 oranges. What you want to look at is year-on-year percentage changes, those are on a relative (previous-year power of purchasing) basis.


adebar t1_ixad5uy wrote

OK, one dollar became 9.1 cents less valuable year-on-year from July 2021 to July 2022. There was no 1-year period in 2022, where one dollar became worth 20 cents less.

If you don't believe me, please tell me during which one-year period the value decreased by 20 cents.