Re:The US economy shrank at an annualized rate of 2.9 percen...
by malandrew on Wednesday June 25, 2014 @07:49PM
(#7947413)
Nominal dollar values is but one way to measure consumption.
The original comment I was elaborating on was talking about other factors that can impact PSR without a change in consumption patterns as measured by what goods and services are received not the nominal value spent on them. One important and very real factor is that nominal income growth for most workers has not grown as fast as inflation. On a macro level you're right, but at the individual level it's that mismatch that matters.
I wasn't talking about measuring consumption in dollars but in value received. If I buy a can of peas this year for $1 and a can of peas next year for $1.10 (assuming no factors specific to the peas or can market), then I have consumed the same amount in terms of the benefit I get. You're also right that I've consumed more in terms of nominal dollar values, but nominal dollar values wasn't the measurement stick I was using when I said they consume the same amount.
The original comment I was elaborating on was talking about other factors that can impact PSR without a change in consumption patterns as measured by what goods and services are received not the nominal value spent on them. One important and very real factor is that nominal income growth for most workers has not grown as fast as inflation. On a macro level you're right, but at the individual level it's that mismatch that matters.
I wasn't talking about measuring consumption in dollars but in value received. If I buy a can of peas this year for $1 and a can of peas next year for $1.10 (assuming no factors specific to the peas or can market), then I have consumed the same amount in terms of the benefit I get. You're also right that I've consumed more in terms of nominal dollar values, but nominal dollar values wasn't the measurement stick I was using when I said they consume the same amount.