A $100k Prize for a Decentralized Inflation Dashboard

Re:A $100k Prize for a Decentralized Inflation Dashboard by bko on Thursday August 05, 2021 @08:22PM (#28081782)

The reason there's no concerted effort for Bloomberg, S&P, etc to create an alternative inflation index is because there's no point. It won't be able to be integrated into financial products. Finance is extremely regulated and apart from some bespoke CDS, getting acceptance of a main stream financial product with this weird index would be very difficult. With smart contracts there is no approval process and a very low cost to create such products. But who knows, maybe no one is interested, but it's still an important project

> That seems pretty consistent with the figures from CPI:

CPI 1970: 31.1 CPI 2021: 570.6 Increase: 570/31 = 18-fold compared to 31-fold. Don't just say "looks similar" when you could do simple division and realize it's not similar. I don't think there is a single economist that would argue that health care spending has not grown considerably faster than the rate of inflation.

Here's the continuously compounded rate of growth of health expenditures as per the st louis fed

DATE HLTHSCEXPHCSA_CCH

1/1/01 8.61255

1/1/02 8.53011

1/1/03 6.8683

1/1/04 7.1269

1/1/05 6.22677

1/1/06 6.17762

1/1/07 6.12021

1/1/08 4.61058

1/1/09 4.60561

1/1/10 3.86769

1/1/11 3.5515

1/1/12 3.53598

1/1/13 2.54628

1/1/14 5.1474

1/1/15 6.26148

1/1/16 5.01743

1/1/17 3.98121

1/1/18 4.16224

You can do the same for housing [1]

[0] https://fred.stlouisfed.org/series/HLTHSCEXPHCSA#0

[1] https://fred.stlouisfed.org/series/MSPUS

[ Parent | on HN ]

Re:A $100k Prize for a Decentralized Inflation Dashboard by gruez on Thursday August 05, 2021 @08:38PM (#28081918)

>The reason there's no concerted effort for Bloomberg, S&P, etc to create an alternative inflation index is because there's no point. It won't be able to be integrated into financial products. Finance is extremely regulated and apart from some bespoke CDS, getting acceptance of a main stream financial product with this weird index would be very difficult.

1. you're thinking that the index would have to be integrated into the product itself (eg. this bond pays s&p inflation index + 2%) for it to be useful. This isn't the case. Even for forecasting or internal rate-setting purposes it would be massively useful.

2. If you check the website for s&p or msci, they got an endless list of indexes. Some of them are even integrated into financial products (eg. tracked by ETF or derivatives). Exotic indexes is definitely not a problem for them.

>I don't think there is a single economist that would argue that health care spending has not grown considerably faster than the rate of inflation.

I think the problem here is that you're conflating per-capita spending with price increase. As mentioned earlier an aging population would increase per-capita spending without necessarily increasing price. People opting to buy better, but more expensive care would also increase per-capita spending without necessarily increasing price.

>You can do the same for housing [1]

What's your contradictory source for the actual price of housing?

[ Parent | on HN ]