Inflation is a systematic distortion of economic signals.

Central banks around the world target a stable price inflation rate of 2 percent annually over the medium term. This is widely considered to be monetary policy’s most important contribution to the smooth functioning of a dynamic economy. This view is wrong on multiple grounds, but there is one problem with it that is commonly ignored. Inflation, even if it remains relatively moderate, can contribute to rising inequality and undermine social mobility. It therefore poses a serious threat to a free and market-based economy. Few things are as potent as inequality, especially inequality caused by the inherently unjust process of inflation, in stimulating further fiscal interventions, higher taxes, and redistribution.
Inflation, even if it remains around 2 percent, creates strong incentives for

Governments are fond of accusing private firms of “greed” when prices increase during periods of inflation. However, they fail to tell the public that government services also face price increases.
Original Article: Is There Inflation in Government-Financed Goods and Services?

Official inflation statistics are biased. Substitution effects and quality changes are problems that cannot be resolved objectively, even with the most sophisticated statistical methods. It may be that the Harmonized Index of Consumer Prices (HICP) overestimates inflation. There are also good arguments for a downward bias. It may also be that the errors in measuring consumer price inflation are negligible. However, even if official statistics show unbiased average inflation for all goods included in the index, problems arise.
Official inflation figures are by no means representative of the general rise in prices in the economy. If we look at the goods and services not included in the index, the direction of the distortion seems indisputable. Its scale is also considerable. Official

Some problems with inflation measures, inequality and social mobility, and further implications.
Download lecture slides at Mises.org/MU23_PPT_27.
Recorded at the Mises Institute in Auburn, Alabama, on 27 July 2023.

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Karl-Friedrich Israel discusses modern econometrics, utility and welfare economics, and econometrics as a set of descriptive tools.
Download lecture slides at Mises.org/MU23_PPT_17.
Recorded at the Mises Institute in Auburn, Alabama, on 25 July 2023.

Measurement in Economics | Karl-Friedrich Israel

Video of Measurement in Economics | Karl-Friedrich Israel

Cancel Culture ist ein Phänomen, das viele für eine merkwürdige Besonderheit der akademischen Welt der Anglosphäre hielten. Hin und wieder treibt sie Wurzeln auch in anderen Ländern. Wenn aber irgendeine Region bisher verschont geblieben ist, dann war es wohl Osteuropa, denn sie hat im Laufe ihrer bewegten Geschichte einiges an Totalitarismus und Gesinnungskonformismus erleben müssen.