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Google pleases the government



October 12, 2010 – Comments (2)

An independent inflation index from Google! When I heard that, my first thought was, "I wouldn't want to be a Google shareholder now!". My second thought was, "It's a great time to be a Google shareholder!"

I was right the second time.

 "Google is using its vast database of web shopping data to construct the ‘Google Price Index’ – a daily measure of inflation that could one day provide an alternative to official statistics.The work by Google’s chief economist, Hal Varian, highlights how economic data can be gathered far more rapidly using online sources. The official Consumer Price Index data are collected by hand from shops, and only published monthly with a time lag of several weeks. 

At the National Association of Business Economists conference in Denver, Colorado, Mr Varian said that the GPI was a work in progress and Google had not yet decided whether to publish it.

While the Federal Reserve is unlikely to panic just yet, Mr Varian said that the GPI shows a “very clear deflationary trend” for web-traded goods in the US since Christmas. Although the data are not seasonally adjusted, Mr Varian said that prices rose during the same period a year ago. The ‘core’ CPI in the US, which excludes food and energy, rose 0.9 per cent on a year ago in August.

“It’s a quite different picture if you go to the UK where you see a slight inflationary trend,” Mr Varian said. He attributed the rise in the UK GPI to the weakness of sterling.

Mr Varian emphasised that the GPI is not a direct replacement for the CPI because the mix of goods that are sold on the web is different to the mix in the wider economy. Housing accounts for about 40 per cent of the US CPI, for example, but only 18 per cent of the GPI."   

2 Comments – Post Your Own

#1) On October 12, 2010 at 11:20 PM, rofgile (99.45) wrote:

This and the investment in an Atlantic power line stretching across the eastern coast were the big news events of the day for me.

I am a google shareholder though.  It seems like they are having a blitz of media lately.  Just a couple of days ago they came out with self-driving cars.

Google is reminding me a bit of a Luther-Corp enterprise, with so many crazy projects.  Maybe they want to be a GE like corporation someday?


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#2) On October 13, 2010 at 1:36 AM, sawchain (< 20) wrote:

Frankly, I don't trust Google to do the right thing.  Their executives are so tied up in politics that I wouldn't be surprised if they manipulated the information.

Here are a few examples:

* Google’s Top Policy Executive to Join Obama Administration

White House Reprimands Ex-Googler After Consumer Watchdog FOIA Request; Group Says Deputy Chief Technology Officer Andrew McLaughlin Should Resign

* Google Maps Removes Lincoln Memorial on Eve of Beck Event

* The Launch of Google Politics

* CEO is wrong to play politics with Google's brand



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