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Google Creates New Inflation Measure

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http://www.guardian.co.uk/business/2010/oct/12/google-create-new-inflation-measure

Google has created a new inflation measure – the Google Price Index – based on the cost of goods sold online which could prove more accurate and up-to-date than official statistics.

Google's mountain of web shopping data could also be used by the online group for economic forecasting ahead of the publication of official statistics, the Financial Times reported.

Google's chief economist Hal Varian said that he is working on "predicting the present" by using real-time search data to forecast official figures which often are published at least a month after the period they cover.

For example, the search results for "unemployment insurance" could forecast actual claims for unemployment insurance, and be used as an alternative measure for the unemployment rate.

Varian was speaking at the National Association of Business Economists conference in Denver, Colorado. He added that the GPI was a new concept and that Google had not decided whether to publish it.

He said that since Christmas, the GPI shows a "very clear deflationary trend" for web-traded goods in the US. America's "core" CPI – the consumer price index official inflation rate which excludes food and energy – rose 0.9% in the year to August.

"It's a quite different picture if you go to the UK where you see a slight inflationary trend," Varian was quoted as saying by the newspaper, which he attributed to the weakness of sterling.

He stressed that the GPI is not a straight replacement for the CPI as mortgage and other housing costs only accounted for about 18% of the Google index, compared to about 40% of the official index.

Interesting.

Anyone prepared to say if the GPI will be better than CPI etc... as an inflation indicator?

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[

Anyone prepared to say if the GPI will be better than CPI etc... as an inflation indicator?

Right here!

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For example, the search results for "unemployment insurance" could forecast actual claims for unemployment insurance, and be used as an alternative measure for the unemployment rate.

Hmm that seems to track people's FEAR of unemployment, which will be more volatile than true unemployment (people are too fearful and too bullish alternately)

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Great for tracking price changes of a stick of ram, not so good for a bag of spuds

Why isn't it? Online grocery shopping is huge now. All the major supermarkets have online shops.

I'd be interested to see how it compares to official figures. No altering the basket to soften the figures.

Edited by Pent Up

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Why isn't it? Online grocery shopping is huge now. All the major supermarkets have online shops.

I'd be interested to see how it compares to official figures. No altering the basket to soften the figures.

point taken

however, the overwhelming majority of people i know still buy their veg from grocers / supermarkets / markets

but if the data is given the correct weighting i guess it will be valid

so yes, maybe it will prove worthwhile

(coughs) I stand corrected!

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I don't know why, but Google scare the crap out of me.

(Actually I do know why, it's because I'm addicted to Alex Jones)

now you've gone public. Your ip is logged, traced and flagged into Googles little red book. Once their mainframe becomes self aware you'll get a late night visit for sure.

Tinfoil hats are available from Yahoo's online store

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Google has created a new inflation measure – the Google Price Index – based on the cost of goods sold online which could prove more accurate and up-to-date than official statistics.

Since when were the advertising industry interested in accuracy & truth?

It is the very opposite of what they peddle (discounting half truths).

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now you've gone public. Your ip is logged, traced and flagged into Googles little red book. Once their mainframe becomes self aware you'll get a late night visit for sure.

Tinfoil hats are available from Yahoo's online store

"This is mainstream news on Bloomberg. It's on-record. We're not in Kansas any more"

:)

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  • 152 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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