Econintersect: John Williams, Shadow Stats, says that, when apples to apples comparisons are made, inflation over the past decade has been as high as 12% annual rate, close to 14%+ peak seen in the 1970’s. Note: An update was added January 19 – see end of article.Changes were made in the way CPI was calculated in 1982 and again in the 1990s.
A second analyst, Doug Short of dshort.com, has prepared a graphical presentation of the history of inflation. One of the graphs in a recent article shows the history of inflation and includes the effects of the changes made to the methodology in the past 30 years.
Go to article for larger graph image.
Sources: Shadow Stats and GEI analysis.
Update added January 19: The value and relevance of the Shadow Stats inflation number has been debated by a number of well established economists. The GEI analysis (by Doug Short) expresses some of the concerns. James Hamilton (a GEI guest author) has documented some of the well researched objections to Shadow Stats inflation calculations at Econbrowser, here and here. This update was prompted by a comment from Jeff Miller.
