Alberto Cavallo
@albertocavallo
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Professor - Harvard Business School. HBS Pricing Lab, InflacionVerdadera, The Billion Prices Project, and Pricestats.
Boston, MA
Joined April 2009
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La inflación mensual de Argentina volvió a caer al 2.6% al 7/22, según las mediciones de PriceStats. Es el nivel más bajo desde diciembre de 2021.
#Argentina
#Inflaci
ón
#PriceStats
Argentina's monthly inflation fell to 2.6% as of 7/22 , according to PriceStats. This is the
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Inflation in Argentina continues to fall. According to PriceStats, the monthly inflation rate is now close to 5%.
La inflación de Argentina sigue cayendo. La tasa mensual medida por PriceStats esta cerca del 5%, con tendencia decreciente.
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La inflación mensual de Argentina medida por PriceStats esta cerca del 8.5%. Es un nivel muy similar al que tenia en Noviembre del 2023.
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La inflación mensual de Argentina fue del 2.8% en julio, según las mediciones de PriceStats. Volvió a subir en los últimos días, con la tendencia estable alrededor del 3%. Por ahora, parece estar estabilizándose en ese rango, sin evidencia de una mayor desaceleración. La medición
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Looking at Argentina's daily price index from PriceStats, we can detect another structural change on March 14th. The slope is now annualized to 78%, roughly half of the previous trend.
Usando el índice de precios diario de Argentina, detectamos un nuevo cambio estructural el 14
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La inflación mensual en Argentina dejó de caer. Llegó al 3.5% el 19 de mayo pero subió al 3.8% en los últimos días según datos de PriceStats.
Monthly inflation in Argentina has stopped falling. It reached 3.5% on May 19th but rose to 3.8% in recent days, according to PriceStats
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Si miramos el índice de precios diario, el ultimo quiebre estructural de tendencia fue el 6 de Enero. Desde esa fecha, la tendencia se ha mantenido relativamente estable con una tasa de inflación anualizada del 165%.
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La inflación mensual de Argentina subió del 2.8% al 3.2% en los primeros veinte días del mes de agosto, según las estimaciones de PriceStats. La tendencia se mantiene estable alrededor del 3%. No hay evidencia de una desaceleración en la última semana.
Argentina's monthly
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How expensive are tradable goods in Argentina, after so much inflation in recent months?
The answer is "about the same" as in the US at the official exchange rate and only slightly lower at the parallel "blue" rate.
Just three months ago, after the last major devaluation of
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La inflación mensual en Argentina está aumentando lentamente, del 3.52% el 18 de mayo al 4.12% el 18 de junio, según las mediciones de PriceStats.
Monthly inflation in Argentina is slowly rising, from 3.52% on May 18th to 4.12% on June 18th, according to PriceStats data.
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Congratulations to Isabel Di Tella,
@MITEcon
PhD student, for winning GOLD in the Pan American games! The first Argentine gold medal for Fencing in 44 years!!! 👏👏
#Esgrima
🤺¡Isabel Di Tella es la campeona de espada individual en Santiago 2023! 🙌🏻
Le ganó a la peruana María Doig por 15-9 y se quedó con la medalla de oro! 🥇🤩
#EquipoARG
🇦🇷
#ArgentinaEnSantiago2023
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New markups paper alert! 👇👇👇👇
How do markups vary over time along the supply chain?
To address this question, I'm very excited to share a new working paper from the HBS Pricing Lab, joint with
@SEAlvarezBlaser
,
@_amackay
, and
@Paolo_Mengano
:
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El gobierno argentino insiste en usar la medición semanal para argumentar que la inflación esta cayendo desde las PASO. Pero el análisis es completamente engañoso. Lo que hay que mirar es la tendencia en el índice de precios (thread)
Se consolida baja del ritmo mensual de inflación, desde valores del orden del 15% en agosto al 7,5%, considerando las últimas 4 semanas.
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An important thing to note about US inflation: the lack of adjustment in the official CPI basket weights is still having an impact. But this time the bias is going in the opposite direction (too much inflation). What is going on?
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Inflation in Russia has increased dramatically this past week. The index constructed by PriceStats/
@StateStreet
using prices posted online increased 1.8% from Feb 28 to March 5. At this rate, March will end with a monthly inflation rate of 8%, and an annual inflation rate of 17%.
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3/ Key Finding 1: Total markups faced by consumers (retail prices relative to production costs) were stable during the recent inflation surge. Contrary to claims of "greedflation," we do not see any discrete change in total markups, suggesting that the increase in retail prices
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La inflación en Argentina continua acelerándose. El índice diario tuvo un nuevo quiebre estructural de tendencia el 8 de octubre (con el salto del dólar blue). La inflación anualizada es ahora del 233%.
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As inflation surged post-pandemic, the prices of the cheapest products grew 1.3 to 1.9 times faster than those of premium products.
We coined the term "cheapflation" to highlight this disparity, which is present in many countries, including the US (shown below)
Our results
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Inflation is higher with a COVID consumption basket. See my latest NBER working paper:
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Terrible herencia del gobierno K: la inflación anualizada de Argentina llegó al 395%.
Este cálculo se basa en la tendencia del índice de precios diario de PriceStats, medida desde el último quiebre estructural, el 25 de Noviembre, hasta el 9 de Diciembre.
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US online prices have been rising much faster since the end of November. The CPI is not yet fully reflecting this.
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On the other extreme, electronics are 80% more expensive in Argentina than in the US. However, this is significantly less than in December, when they were almost 3 times more expensive at the official exchange rate.
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El análisis de cambios estructurales en la tendencia del índice diario sugiere que no hubo variaciones significativas desde el 14 de marzo. La tendencia actual es del 81% anualizada.
The analysis of structural changes in the trend of the daily index suggests that there have been
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La inflación en Argentina sigue aumentando. La tendencia del índice de precios sugiere una inflación anualizada del 266% desde el ultimo quiebre estructural el 8 de octubre. Hace 10 días era de 233%.
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US online prices have started to slow down in recent weeks, suggesting the monthly CPI inflation rate will also be lower in April.
@pricestats
@statestreet
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Cheapflation—a faster rise in the prices of cheaper goods relative to the prices of more expensive varieties—is a global phenomenon that occurs during an inflation surge.
This table from our paper shows the cumulative inflation rates from 2020-24. In relative terms, Germany and
The inflation burden faced by consumers is reduced by sales but increased by “cheapflation”, when the prices of cheaper varieties of goods rise much faster than others, from
@albertocavallo
and Oleksiy Kryvtsov
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The Economist cites my recent paper with Diego Aparicio on "Targeted Price Controls on Supermarket Products"
We looked at past price control programs in Argentina (2007-2015) and found very limited and temporary effects on inflation.
Price controls and an attempt to pep up the peso are unlikely to defeat inflation
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Central Banks should rely more on state-dependent models, which, in response to a large shock, predict an increase in the frequency of price changes and, therefore, a faster cost-passthrough into retail prices. This would have helped Central Bankers avoid the underestimation of
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Inflation continues to increase in Russia. The current annual inflation rate in the aggregate online index is 13%. At this pace, by the end of April, it will be 18%. Some sectors appear to be stabilizing, but food prices are now rising faster and are about 30% of the CPI basket.
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Krugman describes how my work with online prices was useful to know the true rate of inflation in Argentina and the US. The good news is that we can do the same in Russia, where inflation keeps rising. I'll provide some updates soon.
Russia has defended the ruble at the expense of all else. Is that because a plunging currency would be too visible a sign of failure?
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Here is the video of my presentation at Markus' Academy
@MarkusEconomist
. "COVID Inflation: Evidence from Real-Time Data"
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Un gran aporte de Joaquin Cottani en La Nacion. Fundamental para entender lo que esta ocurriendo en Argentina.
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We launched the HBS Global Policy Tracker () to monitor macro policies in response to the pandemic around the world. We focus on fiscal, monetary, and lockdowns. 47 countries so far. The data is updated in real-time by ~25 HBS/Harvard students.
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But food is still cheaper in Argentina (about 75% of the US cost), as can be expected from a food-exporting country.
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Es cierto lo que plantea Ivan Werning. La mayoría de los precios transables se mueven con el dólar oficial. Adjunto evidencia empírica. Este grafico que muestra el costo relativo de una canasta de miles productos idénticos en tres categorías: comida, nafta y electrónicos. Es el
¿El dolar paralelo afecta inflación? ¿La baja de tasas puede subir ese dolar y la inflación?
Yo diría que si el comercial oficial es de libre acceso a importadores y exportador y su regimen es claro y creíble, no. Acá el argumento.
(No opino aca si conviene bajar tasas.)
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There are important differences across categories. For example, car fuels now cost roughly the same in Argentina and the US at the official exchange rate.
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El índice diario tuvo aumentos muy fuertes del 10 al 15 del Diciembre, con una desaceleración en las dos últimas semanas del mes. La nueva tendencia anualizada es del 408%.
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Inflation Is Higher Than the Numbers Say
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Here's an update on Russia's daily inflation: from Feb 24 to March 17, the aggregate price index rose 3.4%. At this rate, the annual inflation will be 15% at the end of March. Prices increased the most in Household and Furniture (9.5%), Health (6.8%) and Electronics (5.7%).
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These "PPP" indices are built by comparing the per-unit price of thousands of carefully-matched tradable goods in food, fuel, and electronics, and aggregated using official CPI category weights.
For details on how they can be used to measure real consumption across countries,
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An article in the FT today citing my work with Covid Inflation Baskets: "How the virus disrupted inflation statistics" via
@financialtimes
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Looking forward to presenting at Markus' Academy this Thursday. I will be talking about current online inflation trends and my research on understanding Covid inflation dynamics. Registration link below.
Are worries about inflation overblown? Tune in on Thursday for a presentation by
@albertocavallo
(
@HarvardHBS
) on how to interpret official data. Register here:
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En este índice diario de inflación argentina, las líneas rojas marcan los días en que hay cambios estructurales de tendencia (ver mi paper con
@GarciaZGaston
) La tendencia actual es 1.4 veces la tendencia inicial, lo que implica una inflación anualizada de 175% en el IPC oficial
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Wondering how remote work might impact wages across the world?
See my new NBER WP, "The International Price of Remote Work", with Agostina Brinatti, Javier Cravino, and Andres Drenik.
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Cuando hay un salto en el índice de precios, siempre la inflación de corto plazo (semanal, mensual) sube y luego baja. Pero esto no nos dice nada sobre el impacto a largo plazo. Lo importante es saber si la tendencia después del salto se estabiliza en un nivel mas alto o no.
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Has
#inflation
reached an inflection point?
Our structural break analysis with daily data suggests "yes" for the US, both headline and core.
But the UK, France, and other European countries are not there yet...
See results for 25 countries in our new paper w/
@GarciaZGaston
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Argentina: la inflación de Diciembre medida por PriceStats llegó al 26.5% mensual.
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5/ Key Finding 3: In the cross section, markups are negatively correlated along the supply chain, such that a higher manufacturer markup corresponds to a lower retail markup. One driver of these differences is product quality. Within a product category, the manufacturer sets
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All the data and replication code for my paper "Inflation with Covid Consumption Baskets" is now available here:
The new version of the paper is also on my website:
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Are Superstar Firms and Amazon Effects Reshaping the Economy?
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Announcing a macro postdoc position at the new Pricing Lab at
@HarvardHBS
. Open for AY 23-24 to those with (and without) AP offers. You will work on inflation research using online & other data provided by companies. Please apply here:
CC
@econ_ra
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El análisis del índice de precios diario, usando la metodología del paper que escribimos con
@GarciaZGaston
, muestra que no hubo cambios estructurales significativos en la tendencia desde fines de marzo.
The analysis of the daily price index, using the methodology from the paper
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Es probable que la tendencia siga aumentando en los próximos días, después del salto en el dólar blue la semana pasada.
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If the CPI had adjusted the basket weights to account for changes in Covid consumption patterns, as I do in my “Covid CPI”, the actual level of monthly inflation would have been significantly lower since January:
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4/ Key Finding 2: Markup do vary over time for manufacturers and retailers, but changes at one stage of the supply chain are partially offset by symmetric adjustments at another, contributing to the stability of total markups.
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6/ Key Finding 4: The manufacturer adjusts prices more quickly in response to cost shocks than the retailer. The manufacturer achieves complete pass-through in levels within two months for aggregate (category) shocks and instantaneously for product-specific shocks. Retailers, on
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Japan is one of the few countries where the CPI inflation is still far below what we find with online prices...
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In a new paper with Oleksiy Kryvtsov, we measure retail stockouts and find they are still affecting many sectors, including food and electronics, putting upward pressures on prices. Here’s a aggregate graph showing US stockouts over time. More coming soon...
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Now That Everyone Is Bullish, Be Cautious
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Congrats
@BrentNeiman
,
@m_maggiori
and
@JSchreger
!
The Central Banking Awards 2020 virtual ceremony
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8/ Markups in other countries have similar patterns to those in the US. The distributions of total markups are strikingly similar across countries, although there is heterogeneity in how they are split along the supply chain. In the time series (not pictured), Mexico shows the
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Our paper on stockouts and inflation with O. Kryvtsov was published in the JIE. The data ends in 8/22, but here’s an update for US stockouts until May. They are back to pre-pandemic levels. Helps explain the disinflation and is consistent with my new paper on structural trends.
This article provides a high-frequency measure of consumer product shortages. Stockouts were associated with rising prices in most sectors and countries. A model suggests these effects are due to elevated replacement costs and higher exposure to trade. 2/2
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All sectors monitored online in Russia are showing big increases in the last 7 days: eg. Food and Beverages 1.6%, Electronics 3.6%, Health goods 4.2%, Furnishings and Household 6.5%.
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7/ Key Finding 5: The pass-through of production costs to retail prices is slower for unexpected cost changes. This suggests that forecasting errors in costs can play an important role in slowing down cost passthrough rates.
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2/ A distinguishing feature of the paper is that we observe production costs, wholesale prices, and retail prices for individual consumer products across countries. This allows us to directly measure markup levels and dynamics along the supply chain from July 2018 to June 2023.
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To Modernize the Consumer Price Index, BLS Should Accelerate Use of New Data Sources and Provide Price Indexes for Different Incomes, Says New Report via
@theNASEM
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The other Amazon effect: How retail prices have become less insulated from supply shocks via
@WSJ
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My work on the measurement of Covid inflation featured today in The Economist's Daily Chart:
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Congratulations to Tomas Pacheco, a member of the HBS Pricing Lab, for winning this teaching award!
He was ranked first among 318 tutorial professors at UdeSA in Argentina.
🏆 Felicitaciones a Tomás Pacheco
@1tomaspacheco
elegido entre 318 tutores de
@UdeSA
como mejor profesor de clases tutoriales de grado. Su destacado trabajo en cursos desafiantes muestra su firme compromiso con la enseñanza. Los alumnos destacan su claridad y empatía!👨🏫🌟
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First, the CPI is still giving too much weight to transportation (with strong price increases coming from energy and “used cars and trucks” in recent months). But the Opportunity Insights data shows that consumer spending on transportation is still 25% below pre-Covid levels.
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Building on my paper "Inflation with Covid Consumption Baskets", the WSJ created this customizable "Inflation Rate Calculator" today:
via
@WSJ
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The pandemic is costing Americans more money than official numbers suggest
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@IvanWerning
Here you go. So far more than 4K econ papers with "Covid" in title or keywords. Source data Repec.
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Comparto una entrevista que me hicieron el año pasado sobre mi proyecto para medir inflación en Venezuela con teléfonos móviles:
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Great lineup of papers on inflation during and after the Covid era, today and tomorrow at the
@nberpubs
conference
Tune in tomorrow at 8:30am (EDT) for Oleksiy Kryvtsov's presentation of our joint paper, "Price Discounts and Cheapflation During the
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BPP and PriceStats win "Economics in Central Banking" award.
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Venezuela's inflation now over 40% per month. Our data is updated every day. See
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We also have a micro postdoc available at the new Pricing Lab at
@HarvardHBS
, where you can work with industry data alongside Alex MacKay (micro side of the lab). Here is the micro posting:
CC
@econ_ra
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It was great to collaborate on this project with the IMF and
@Mastercard
. We used high-frequency card data from 47 countries to show that the Covid-induced spikes in e-commerce are dissipating, but there is still substantial variation across countries and sectors
Credit- and debit-card data from dozens of countries show that the share of online spending in many advanced economies is now at or below trend levels before the pandemic. Read our latest
#IMFBlog
with
@Mastercard
@HarvardHBS
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More graphs on the Covid CPI, including Core estimates, can be found here.
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Looking forward to participating in this FED discussion on "The Unequal Burden of Inflation". Tomorrow on Zoom, 11am EST.
The Cleveland Fed’s Center for Inflation Research is hosting its next Conversations on Central Banking tomorrow, November 14, via Zoom. The session’s focus is: “The Unequal Burden of Inflation.” Register to attend:
#Inflation
#EconTwitter
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Nueva pagina del BPP
We just finished our new website, which makes it easier to find our public data and papers
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Low-income households are experiencing the highest Covid inflation in the US. New results added to my paper "Inflation with Covid Consumption Baskets"
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Second, this measurement bias is exacerbating the so-called “base effects” because the annual rate compares the price level today to a price level that was low a year ago (see below). The effect is stronger with the fixed-basket CPI, which fell "too much" last year.
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The reason? During much of the 2010s, the rise of online competition had made prices far more flexible, even for traditional retailers.
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Great new book from my HBS colleague
@Tsedal
Neeley, with lots of insights on how to use remote work more effectively.
#RemoteWorkRevolution
.
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Hace un mes (30 de Junio) PriceStats calculaba un tipo de cambio de PPP a 18.08 pesos por dolar, exactamente el valor de mercado de ayer
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I'm excited to be in Sintra for the ECB's annual meeting, where my coauthor Francesco Lippi will present at 10:30am (5:30 EDT) our paper "Inflation and misallocation in New Keynesian models". Click on the link below to see it live.
#ECBForum
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New paper with my coauthors Rob Feenstra and
@RobertInklaar
. We find that accounting for product variety increases the cost of living in many middle and low-income countries relative to the US.
Welfare from the Melitz (2003) model is similar to the Jones-Klenow (2016) "beyond GDP" calculation of country welfare, but for different reasons, from
@albertocavallo
, Robert C. Feenstra, and Robert Inklaar
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However, measurement issues are only part of the story about current US inflation levels. As I noted before, online prices have been rising much faster since December, as demand recovers in a context of persistent supply disruptions.
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Here's a summary of my research on recent inflation dynamics (measurement and stockouts) in the latest NBER Reporter:
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If you ever need historical and up-to-date exchange rate data, check out this startup from a couple of my HBS students: Simple and free APIs.
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