I Win My Inflation Bet with Robert Murphy By Bryan Caplan

Six years ago, Robert Murphy and I made the following bet:

At any point between now and January 2016, if there is a year/year

increase in seasonally adjusted CPI that is at least 10%, then you pay me at that time $100. If we get to January 2016, and there has not been any 12-month

stretch in which the above happened, then I pay you $100 at that time.

The December data is not yet in, but unless an unhailed hyperinflation stuck last month, I’ve comfortably won the bet. Indeed, cumulative inflation over the entire period from January 2010 to November 2015 was only 9.5%.

Why was I so eager to bet Bob on this? The TIPS market, which consistently forecast very low inflation for many years. And continues to do so. The upshot is that I’m happy to make the same bet for the next six years, too. Takers?

P.S. Respect Bob in the comments.