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To: Don Lloyd who wrote (10971)11/4/2001 3:19:33 PM
From: KyrosL  Respond to of 74559
 
Don, the hedonic adjustments for computers are probably not done correctly. But other goods, for example drugs and medical services, that should be adjusted hedonically, are not, and therefore, I think that we are substantially overestimating inflation, even with the excessive hedonic adjustment in computers.

Between 1992 and 1998 the average US life expectancy has increased by nearly one year, or over 1%. No matter what measure you use for the value of a US life, this represents tremendous value which is not captured by current economic statistics. IMO, this wipes out a lot of the reported inflation between 1992 and 1998.



To: Don Lloyd who wrote (10971)11/4/2001 5:57:37 PM
From: Moominoid  Read Replies (2) | Respond to of 74559
 
But these pricing adjustments pull down the price even faster, which seems to be the opposite of what you are saying. It still is true that Price*Quantity = amount paid - the question is how much of that amount paid is a fall in price and how much an increase in quantity per unit sold.