Sunday, December 19, 2010

Paging Paul Krugman: Climb in Online Prices Outpacing CPI


Your econometric buddies at MIT aren't doing much to prove your disinflation/deflation scenario.

Their Billion Prices Project, where they update statistics every day on 5 million individual items, including online prices for supmarket items, electronics, apparel, furniture, real estate, and more, is climbing faster than the CPI.

The BPI, which was as low as 96.6 in February 2008, is now at 100.6. Given that the internet tends to carry more items, such as electronics, that fall in price, this is extraordinarily alarming.

I'm hoping you can explain in your column how this is obviously a sign of deflation.

Paul?  Uh, Paul?

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