Home > Data, Inflation > What Would Irving Fisher Say?

What Would Irving Fisher Say?

UK in "Deflation".  Source: ONS, Quandl, Nationwide.

UK vs “Deflation”. Source: ONS, Quandl.

If you compared two periods:

1) Period One, where nominal asset prices fell 15%, nominal incomes fell 4%, the labour market was contracting sharply … oh, and the CPI rate was usually above 3%.

2) Period Two, where nominal asset prices are at all time highs, rising 5-10% p.a., nominal incomes are rising 3-4%, the labour market is expanding rapidly… oh, and the CPI rate was slightly negative.

… which period would you call “deflation”?

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Categories: Data, Inflation
  1. Nick
    May 21, 2015 at 09:40

    So CPI is absolutely useless as an indicator.

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