Evan Wasner

Inflation is back. Real wages are down. But things may already be worse than they look. During the COVID inflation the data said real wages ROSE, providing a buffer against today’s price surges. But my NEW WORKING PAPER finds: those real wage gains were a statistical illusion🧵

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Helaine Olen@helaineolen·4d

The vibes were real. Inflation was — and is — real. The lesson is when masses of people say their finances are declining, believe them.

Inflation is back. Real wages are down. But things may already be worse than they look. During the COVID inflation the data said real wages ROSE, providing a buffer against today’s price surges. But my NEW WORKING PAPER finds: those real wage gains were a statistical illusion🧵

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Tatum Turn Up@tatumturnup

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Evan Wasner@EvanWasner·4d

I'm sure 100% of people agree with me when I say the skyrocketing utility bills from data centers is absolutely worth it for this

This is the greatest video I’ve ever seen. No notes. The lifeless clanker carcass just laying there. No crowd reaction, anything. Just Billie Jean. Until its lifeless shell is shamefully dragged off. Purely amazing.

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Evan Wasner@EvanWasner·5d

Every quarter, each household has a new consumption basket (specific to their own consumption habits). So items that are no longer consumed get dropped, new items get added. For quantity changes, I use Laspeyres indexes (so quantities are held fixed), but in the Appendix I include results with Paasche and Fisher indexes—the main results are unaffected.

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Scott Winship@swinshi·6d

@EvanWasner How do you deal with substitution?

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Evan Wasner@EvanWasner·6d

Inflation is back. Real wages are down. But things may already be worse than they look. During the COVID inflation the data said real wages ROSE, providing a buffer against today’s price surges. But my NEW WORKING PAPER finds: those real wage gains were a statistical illusion🧵

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Evan Wasner@EvanWasner·5d

You can find the link to the paper here (X keeps hiding my posts with the link to the paper on SSRN, not sure why): evanwasner.com/publication/20…

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Evan Wasner@EvanWasner·6d

Furthermore, the results of this paper suggest: maybe sometimes public perceptions can be more accurate than “the data” after all. These lessons will be important as we head into another inflation fueled by supply shocks. 22/22

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Evan Wasner@EvanWasner·5d

@ernietedeschi @EconChrisClarke Every time I try to post the SSRN link it gets hidden, I have no idea why. Try the download link here (if this post even shows...) evanwasner.com/publication/20…

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Ernie Tedeschi@ernietedeschi·6d

@EconChrisClarke @EvanWasner I was looking too and found it here (@EvanWasner please point us to a different draft if this one is wrong) papers.ssrn.com/sol3/papers.cf…

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Evan Wasner@EvanWasner·6d

The short answer is yes. When it comes to annual household income, the measures in the graph are after taxes and transfer payments. So in 2020-2021, the stimulus checks and other tax credits resulted in a big increase in after-tax income. Then these disappear, and we see purchasing power in 2022-2023 dip below even 2019 levels for most households. When it comes to wages, it's a little more nuanced. There is a big jump in 2020 because a lot of people became unemployed, especially low-wage workers—statistically, this results in an increase in aggregate wage measures, but doesn't mean that people who remained working actually saw wage increases. But by 2022 unemployment returned to pre-pandemic levels.

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Money with Katie@moneywithkatie·6d

@EvanWasner This is so interesting. Do these charts show that real purchasing power increased briefly around 2020/2021 then fell back to pre-2020 levels? I'm unsure if I'm misinterpreting.

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Evan Wasner@EvanWasner·6d

@EconChrisClarke here it is: ssrn.com/abstract=67704…

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Christopher Clarke@EconChrisClarke·6d

@EvanWasner Do you have the manuscript for the working paper?

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великий комбинатор@grapesmoker·6d

GIF

Inflation is back. Real wages are down. But things may already be worse than they look. During the COVID inflation the data said real wages ROSE, providing a buffer against today’s price surges. But my NEW WORKING PAPER finds: those real wage gains were a statistical illusion🧵

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Zachary D. Carter@zachdcarter·6d

Really interesting paper x.com/EvanWasner/sta…

Inflation is back. Real wages are down. But things may already be worse than they look. During the COVID inflation the data said real wages ROSE, providing a buffer against today’s price surges. But my NEW WORKING PAPER finds: those real wage gains were a statistical illusion🧵

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Isabella M Weber@IsabellaMWeber·6d

The “Vibecession” was key to the downfall of Bidenomics. This must read paper leverages scanner data to show: People were right to be worried about affordability. Real wages can fail to capture the actual living standards of the majority. We need better measures of affordability.