It is hard to think of a website so loved by its followers and so scorned by economists as John Williams' ShadowStats, a widely cited source of alternative economic data on inflation and other economic indicators. Any econ blogger who has ever written a line about inflation is familiar with ShadowStats. Time and again, readers cite it in comments, not infrequently paranoid in their tone and rude in their language.
Brief replies that cast doubt on some of more extreme
claims made by ShadowStats fans don’t seem to have much effect. After a recent round of comments, I promised the editor of one website to undertake a thorough deconstruction of ShadownStats. Here is the result.
What ShadowStats Gets Right: The CPI is a Flawed Measure of the Cost of Living
is Williams’ attempt to provide an alternative to the official consumer
price index (CPI), which he views as a flawed measure of what members
of the general public have in mind when they think of the cost of
living. Let me start by saying that although I share the skepticism of
many economists about the specific numbers published on ShadowStats, I
agree that the official data do not tell the whole story. I support
Williams’ attempt to provide an alternative to the official consumer
price index that more closely reflects pubic perceptions of inflation.
Here, in his own words, is how Williams explains his undertaking: >>>Read more