But since this is an index, we really should use a logarithmic scale. This captures the fact that a change from 50 to 55 (10% increase in prices) is the same as from 500 to 550 (10% increase in prices). The same data, graphed this way, is below:
This may not be reassuring, but it at least isn't as panicky.
1913 prices were 29.7% of 1967's, (54 years later) or less than a third as high.
2006 prices were 603.9% of 1967's (39 years later), or 6 times as high.
You can see the deflation in the Great Depression clearly, along with the
inflation in the Nixon (wage-price controls), Ford (Whip Inflation Now),
Carter (malaise) and early Reagan years. (1981: I got a 16.5% mortgage with
5 year balloon. 1982: First year I opened an IRA, with a 14% CD rate).
No comments:
Post a Comment