People have fewer kids as they get richer. Very clear pattern. https://en.wikipedia.org/wiki/Income_and_fertility … 2/x
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Replying to @avi_eisen @Molson_Hart
If your wages go up by 3% and inflation is 2%, you have 1% more real spending power, full stop. Inflation is an average of all spending categories - if housing went up 5%, others must have gone down in similar proportions to keep the average at 2. 3/x
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Replying to @avi_eisen
That’s not exactly right. CPI is determined by a basket of goods selected by the federal reserve which they weight and swap out as they see fit.
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Replying to @Molson_Hart
It is exactly right. CPI is an attempt to measure inflation, which as I said earlier is not completely accurate - it likely overestimates. See https://www.wsj.com/articles/americans-are-richer-than-we-think-11566428343 …, or going back a couple yearshttps://www.wsj.com/articles/the-u-s-underestimates-growth-1431989720 …
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Replying to @avi_eisen @Molson_Hart
It certainly would explain a lot about interest rates. If you believe inflation is significantly above CPI, then real interest rates are far below zero and have been for a while. That's implausible.
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Replying to @Molson_Hart
Japan has had positive interest rates except for a year or two recently. What is your point?
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Replying to @avi_eisen
You said negative interest rates are implausible and I gave you a real world example (no pun intended).
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Replying to @Molson_Hart
negative real interest rates for extended periods of time. Didn't happen in Japan.
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Replying to @avi_eisen @Molson_Hart
https://data.worldbank.org/indicator/FR.INR.RINR?locations=JP … I'm looking at this. Should I be looking elsewhere?
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