Without entering in the details of whether a soup and sandwich are worth 17.50 EUR, one thing I've noticed when people discuss prices is that they always refer to "what it used to cost" and forget about the real economic force of inflation.
When I enter a shop and a soup and sandwich cost almost 20 euros, I wonder what the hell happened to the world to increase its cost 3 or 4 multiples than what I used to pay 15 years ago, for example, while wages have absolutely not. And I imagine how much the establishment owner must cringe at having to marking up the price so much just to be able to afford staff and making a little profit for themselves.
One thing's for certain: the inflation figures economists publish are manufactured nonsense that underestimate how much the cost of living has increased for the regular citizen. Models tend to be incorrect representation of reality, and there are huge political incentives to make the model of inflation numbers much smaller than they actually are.
jjgreen · 3h ago
In the UK at least, official inflation is the CPI which takes the geometric mean, while prices increase at RPI, which is the arithmetic mean. To know why, look up the arithmetic-geometric mean inequality.
SG- · 3h ago
today's generation is doing exactly what we used to make fun of people that said "in my days a coca-cola used to cost a nickel".
When I enter a shop and a soup and sandwich cost almost 20 euros, I wonder what the hell happened to the world to increase its cost 3 or 4 multiples than what I used to pay 15 years ago, for example, while wages have absolutely not. And I imagine how much the establishment owner must cringe at having to marking up the price so much just to be able to afford staff and making a little profit for themselves.
One thing's for certain: the inflation figures economists publish are manufactured nonsense that underestimate how much the cost of living has increased for the regular citizen. Models tend to be incorrect representation of reality, and there are huge political incentives to make the model of inflation numbers much smaller than they actually are.