My view follows the conventional economic opinion: asset prices are in a different category than the prices of consumer goods for current consumption, and since they behave quite differently, it does not make sense to lump them together. The Consumer Price Index in the United States no longer includes house prices, which is standard for developed countries now. This reflects a desire to have the CPI reflect the cost of current production. Meanwhile, I typically use “inflation” as a shorthand for consumer price inflation, following the convention generally held by market commentators and economists.
I see two main reasons for objecting to this view: the cost of living ought to incorporate house prices, and arguments that “inflationary policies” are seeping into asset prices.…
Bond Economics
Asset Prices And Inflation
Brian Romanchuk
Brian Romanchuk
No comments:
Post a Comment