purchasing power

It turns out we're all wrong about "inflation" - GDP deflator vs. PPP vs. CPI

Good discussion of the difference between "inflation" and "purchasing power" as used in economic statistics, over at Naked Capitalism. Be sure you read the comments as well.

It turns out when pointy-headed economists and bureaucrats say "inflation", it doesn't mean what you and I think it does. Stupid us! We're really concerned about "purchasing power."

Oh.