Former Treasury Secretary Larry Summers put out a tweet thread on February 27, 2024 highlighting his participation in a new paper estimating a more accurate Consumer Price Index (CPI) cost of living estimate for the US.
What is sure to jolt many is that Summers paper estimates the real cost of living increase peaked in 2022 by 18% when mortgage, auto loan, and interest expenses generally are considered and was running at 9% at the end of 2023. Compare that to the 3.2% offical CPI published for February 2024.
This graph illustrates the disparity between Summers’ new CPI estimate including mortgage and debt costs and published official CPI numbers:
Summers’ tweet thread about his new paper can be found here:
In new NBER paper with @MA_Bolhuis, @juddcramer and Oskar Shulz, we argue that the unprecedented increase in borrowing costs is crucial to explaining the low consumer sentiment of the last two years. 1/N
t.co/4CF4xVTlHv— Lawrence H. Summers (@LHSummers) February 27, 2024
jensendavid.substack.com/p/former-us-treasury-secretary-says