Wednesday, August 4, 2010

Components of Inflation

It's interesting to break out the components of price changes.  The above graph (data from Fred), shows how several major components of the US consumer price index have changed over time.  The central bank acts to keep average price changes more-or-less in a narrow band (currently less), but that is a sum of individual components which are going all over the map.  In particular, the ability of the medical sector to extort more and more from the rest of us is very much in evidence.  (Note that, at least in theory, the price indices are adjusted for quality changes, so this is supposed to represent the price change in equivalent good and services, not the availability of new/better goods and services).

1 comment:

Robert said...

Medical care has and will be impacted by energy costa. Hospitals buzz 24/7 and are energy hogs. Following a celebrity ski death from an epidural hematoma Quebec was criticized for its inadequate helicopter response. I was involved with training and practice from 1949 to 1999. The changes in radiology and all of medicine were staggering. I could not have imagined modern ultrasound, MRI and other digital imaging, joint replacements. or modern cardiology subspecialties such as electrophysiology. Then there is the terminal care problem. Many cancers were once essentially. untreatable. Now there are perhaps too many options.

Christopher Hitchens can be a spectacular writer.