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To: GraceZ who wrote (207869)	12/4/2002 1:48:55 PM
From: reaper	Read Replies (1) \| Respond to of 436258

Grace, i frankly don't understand what this means. (i) has a higher correlation with past money growth than other inflation measures this sounds circular to me. basically it says "we have decided that past MONEY growth is the correct measure of inflation. we have found a data series that has a high correlation to money growth. therefore, it is a better measure of inflation" so, one, why not use money growth as your measure of inflation. and two, what if one believes that inflation in GOODS AND SERVICES prices is NOT solely a monetary phenomenon (as they ignore inflation or deflation in ASSET prices) (ii) resulting in improved forecasts of future inflation. i don't know what this means. reading Gene Epstein in Barrons, i have seen him say that the CPI and median CPI tend to converge over time. so i guess what they are saying here is that the median CPI provides an improved forecast of future CPI? but they have just gotten through telling me that CPI does not measure inflation correctly, so how is something that improves my forecast of something that doesn't correctly represent inflation valuable? these are frankly honest questions, not my usual rhetorical arse-hole-ness. meanwhile, my treasuries keep rising in price.... Cheers