Prof. DeLong:

I stumbled on some of your web pages, and will soon go to your home page for more info on inflation, which I have long considered a fascinating subject.

One point: The calculations of dollar values from 1960 to 1999 don't agree with a U.S. Commerce Dep't. release I saw reported through the AP in 1997. That release said the Jan. 1962 dollar was then (as of Jan. 97) worth a dime. This made a dandy comparison for goods and services, and while many consumer items tracked well, an astounding number had gone down in unadjusted dollars: tires, for example, and shoes, many clothing items, gasoline and so on. Productivity gains, competition and imports seem to me to be the main reasons.

Any comments? I'll probably find more reliable observations on your home page, but I'd value your specific thoughts on the possible conflict.

-- James Foy (jimfoy@earthlink.net), May 24, 2000

Answers

Table B-3 from the back of the _Economic Report of the President_ (which uses the Department of Commerce's numbers, and is a convenient source) says that a dollar in 1999 was worth a little less than a quarter--21.44 cents--back in 1960 because of inflation between 1960 and 1999. Michael Boskin and company who argue that standard statistics overstate inflation argue for a higher number--35 cents or so. I haven't seen anyone argue for a dime...

-- Bradford DeLong (delong@econ.berkeley.edu), May 25, 2000.