Inflation

You may think the little story of my mother interesting, but there's actually more serious implications that may skip your eyes.

To begin with, the story happened 60 years ago.

Now, let's see: it cost 5 dollar for a chicken and 10 cents for an egg at that time. For those who do not go to (super)markets yourself, the price today is around 12 to 15 times higher.

Of course that's because of inflation.

The point is: What was the inflation rate ?

My BA-II calculator tells me that it is 4.2 to 4.6% per year - a figure very close to what the government officially announce.

But, at this point, you may notice immediately that not everything has its price raised in the same rate. Sixty years ago, a small apartment in some marginal area cost $10,000, and the average household income was $150 - both increased by around 100 folds now.

And it means an inflation rate of 8%.

The implication ? I shall elaborate tomorrow.