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Politics : Ask Michael Burke -- Ignore unavailable to you. Want to Upgrade?

To: Michael Bakunin who wrote (78458)	3/23/2000 11:53:00 AM
From: BGR	Respond to of 132070

It's ok to put the a word in place of the h one, Bakunin. :-) If rent prices have been tracking real estate prices nationally, then one of several things must be true: 1. Rent component must be underweighted in the CPI calculation, or, failing that, 2. Real estate prices must be growing at a pace comparable to the CPI growth, or, failing that, 3. Rent increases must be growing at a pace slower than real estate prices. Take your pick (or forward other possibilities). -BGR. PS: 4th possibility, real estate prices are tracking rent, and rent is appropriately weighted in CPI calculation, but other prices are falling steeply enough to balance the increase in real estate prices. Either 3 or 4 makes the issue of rising real estate prices a moot point when gauging overall CPI. 2, as many have argued in the thread, is not true in pockets of the country. Alternatively, the national average increase is tracking CPI growth, again not an issue when it comes to measuring inflation. So that leaves 1 open. Alas, it always comes to that ... the CPI formula.