A Bourse Diary

Thoughts on stocks, speculation and ... life

Friday, June 23, 2006

New Economist: Inflation: a rational phobia?

New Economist is posting some interesting research on the inflation estimations and on the current fears:

New Economist: Inflation: a rational phobia?

Everyone is looking at the matter in his own way. Some argue, that inflation figures are underestimated due to hedonic measurement, others say statistical effects such as "owners equivalent rent" makes inflation rate looks higher than in real life...

It's not an easy issue. What I tend to is: inflationary pressures should come down to confortable levels after those long run in rising interest rates. From the corportae site there are still no worrysome signs. If inflation is in tendency lower than statistically shown, the real interst rate is higher and should lead to a harder landing.

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