Niall Ferguson Has Not Admitted He Was Wrong About Inflation

tags: Niall Ferguson



Adam Ozimek is a contributor for Forbes.

Economic Historian Niall Ferguson is upset with Paul Krugman for lacking both civility and the humility to admit when he is wrong.  I’m a fan of more civility and humility in the blogosphere, and I happen to agree that Krugman can be both uncivil and overconfident. But while in general I stand ready to support calls for humility and civility, Niall Ferguson himself needs to do a better job of admitting past mistakes, and until he does I don’t blame people for not taking his complaints seriously.

The problem is from 2010, when Ferguson had this to say about inflation:

And the reason the CPI is losing credibility is that, as economist John Williams tirelessly points out, it’s a bogus index. The way inflation is calculated by the Bureau of Labor Statistics has been “improved” 24 times since 1978. If the old methods were still used, the CPI would actually be 10 percent. Yes, folks, double-digit inflation is back. Pretty soon you’ll be able to figure out the real inflation rate just by moving the decimal point in the core CPI one place to the right.

This may look like a modestly benign claim, or at least no more controversial than arguments you hear about what the “true unemployment rate” is. But this is really much much worse.



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