Re:The Shock of Sweden's Housing Market Is Hitting the Count...
by dragonwriter on Wednesday November 15, 2017 @10:04AM
(#15704225)
> Salaries don't necessarily rise at the same rate as inflation. If they did, there would be 0% real growth in the economy.
You are confusing “salaries” with “output”; salaries (or even domestic incomes in total, which involves more than salaries) growing at the rate of inflation can occur with negative or positive real growth. Zero real growth means output growing at the rate of inflation. (National economies aren't closed systems, and some output may produce foreign rather than domestic income, as in returns to overseas investors.)
Re:The Shock of Sweden's Housing Market Is Hitting the Count...
by opportune on Wednesday November 15, 2017 @12:29PM
(#15705570)
True, but for practical purposes salaries (or the mean of salaries + returns from investments) closely approximate output. In any case it should be clear that salaries and inflation aren't directly linked. Salaries should (generally) increase slightly more than inflation as productivity increases over time
Salaries don't necessarily rise at the same rate as inflation. If they did, there would be 0% real growth in the economy. Inflation is usually measured by watching the prices of a basket of goods: if those goods' prices increased by 5%, then inflation is 5% (in reality it can be more complex than this).
Inflation isn't a "real" metric in the sense that it affects all things equally. Housing prices could increase by 50% but the price of a gallon of oil or a bar of soap could decrease by 10%.