Let me see if I have this right: if the price of champagne increases and I switch to beer, then substitution dampens the effect of inflation. If I switch from a calculator to a computer, then that change represents an increase in quality and not an increase in price. I recall Doug's describing the politics behind the calculation of quality changes in gasoline because of the mandated additives.
Aside from the asymmetry, one good point might that the Federal Reserve might have a harder time justifying tightening monetary conditions to fight inflation. Or will they merely recalibrate their estimates of the mystical natural rates? Doug Henwood wrote: > Eric Nilsson wrote: > > >RE > >> It's been clear for a long time that the BLS has largely gone along > >> with the Boskin stuff . . . > > > >I imagine that the behavior of the BLS towards "revising" (sic) the CPI > >changed once Katherine Abraham left as head of the BLS. > > > >Her term expired in about September 2001. I bet no one in the administration > >wanted to offer her a new term. She was a strong advocate against mindlessly > >changing the CPI methdology. > > Doubt it. All these "technical revisions" have been happening over > the last few years, and I'll bet this one's been in place for a while. > > Doug -- Michael Perelman Economics Department California State University Chico, CA 95929 Tel. 530-898-5321 E-Mail [EMAIL PROTECTED]
