#171 - Bridging the Inflation Perception Gap-Webster vs. Populism

In this episode, we delve into the evolving definition of "inflation" and the cognitive biases influencing public perception. While economists traditionally define inflation as the gradual loss of purchasing power reflected in the CPI, many Americans now equate it with high prices. This shift, highlighted in Mike Allen's article "The New Inflation," underscores a significant gap between professional and public understandings. We explore how biases like confirmation bias, anchoring, and the Dunning-Kruger effect contribute to this divergence. By recognizing these biases, we can better navigate discussions on inflation and foster a more accurate understanding of economic terms.

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