Within 1 or 2 percentage points, what has the U.S. inflation rate been during the last 20 years?

Within 1 or 2 percentage points, what has the U.S. inflation...

Key Concepts

Inflation

Inflation refers to the rate at which the general level of prices for goods and services rises over time, reducing purchasing power. It is a key economic indicator measured by indices such as the Consumer Price Index (CPI) and used to assess the economic stability and cost-of-living changes within a country.

Time Series Analysis

Time series analysis involves examining data points collected sequentially over time to identify trends, patterns, and cyclical behaviors. This method is crucial for understanding how economic indicators like inflation change over periods such as the last 20 years and for making informed projections based on historical data.

Economic Trends

Economic trends refer to long-term movements or shifts in key economic variables, such as inflation, that provide insights into the overall performance of an economy. Tracking these trends is essential for policymakers, economists, and investors to make decisions regarding monetary policy, investments, and other economic strategies.

Data Visualization

Data visualization is the practice of representing data through graphical formats like charts and graphs to facilitate understanding and analysis. Visual tools are particularly useful when dealing with time series data, as they help illustrate trends, fluctuations, and comparisons, making complex information more accessible and comprehensible.

Transcript

00:01 Hey guys, welcome to another economics example where we're going to be talking some more about inflation.

00:06 And for this example specifically, i just wanted to show you guys the inflation in the u .s.

00:13 And canada over the past 20 years.

00:16 Just to kind of prove the point that a lot of modern countries are trying to keep their inflation at between that one and two level.

00:26 Now, a little bit about each of these graphs.

00:30 They're using slightly different inflation rate measurements.

00:34 Both these graphs come from statista, by the way.

00:40 But the measurements for the united states inflation rate called chain inflation rate is using something called chained consumer price index, which takes into account the substitution bias and the new product bias that we talked about previously in some of the other examples.

01:04 So technically, the measurements for inflation used in the u .s.

01:09 Example are more accurate than the ones in the canadian example.

01:15 So that would mean that all these numbers in the canadian example are probably overstating it a little bit.

01:24 But as you can see, they're both quite similar, and they both had a massive dip at around 2008, 2009.

01:33 You probably know what that was from, the subprime mortgage crisis.

01:38 But other than that, they both try and keep their inflation rates at something below three and above one.

01:48 And that's a pretty healthy level of inflation for a country to have because you can benefit from some of the minor benefits that inflation can have.

01:59 And you cut down on any of the negative effects of hyperinflation or just really high inflation...

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