Wrong Measurement, Wrong Macro Call

by Keith Weiner

We have written much on the topic of economic measurement. Does the dollar measure gold, is it appropriate to say that “gold went up”? Or does gold measure the dollar?

Does a line of gummy bears laid out on the kitchen table measure the ruler? Does one stretch some rubber bands one day, and say that “the steel meter stick is 6.8 rubber bands long”, but the next day observe that it has gotten longer and is now 7.1 rubber bands long? Does the sinking ship in the stormy seas say that the lighthouse is going down and up, but mostly up?

Consumer Prices & Wages

If you drop both a brick and a board over the edge of a cliff, they both fall. But the brick falls a bit faster, thanks to its higher mass to surface area ratio.

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