ONLINE PRICE SHOPPING AND GLOBAL LABOR POOLS CONTRIBUTE TO LOWER INFLATION
- Combining the two points here, the Adobe DPI inflation rate – adjusted for new goods – is more than 3 percentage points per year lower than the CPI inflation rate for the same categories from 2014–2017.
- Essentially, comparison shopping effects the price of goods available online and offline. Methodologies the BLS uses to calculate the inflation rate may be missing some key data.
- Conclusion: Inflation may be much lower because of antiquated methods of collecting price data.
- In particular, we show how online prices can be used to construct daily price indexes in multiple countries and to avoid measurement biases that distort evidence of price stickiness and international relative prices.
- Conclusion: You may be able to track inflation in real time.
- A Primer on the state of the global labor market.
- “Over the next five years there will be an estimated 213 million new labor market entrants – 200 million in developing countries alone. This raises the issue of youth unemployment. Already, the youth unemployment rate exceeds 12 percent in developing countries – more than three times the unemployment rate for adults. Regionally, the highest youth unemployment rates are found in the Middle East and North Africa regions, where nearly one in three young people in the labor force are unable to find work. Young women, in particular, are struggling to find work in these regions, with unemployment rates approaching 45 percent.”
- Conclusion: The global labor market is much looser than the US labor market.
- Joe Lavorgna says NAIRU works in theory but not in reality.
- I’m more conditioned to think that Global Labor markets matter more for inflation pressure that domestic labor markets.
- To test this, we would need to look at wages by industry, comparing easily outsourced jobs to non exportable jobs and see if one is rising faster than the other.
In the old world, the labor supply was much smaller and local, so you were hiring along a steeper wage curve.
In the new world, the labor supply is large and global, so you are hiring along a flat wage curve.