What's the relationship between real dollar adjustment and inflation?
October 21, 2021 1:30 PM Subscribe
Is the adjustment used for computing "real dollars" in econometric datasets the same as compensating for inflation, or is it something different? For example, if I look up real median US household income on FRED, I see that the value for 1984 is $53,337 in 2020 USD. If I then use an inflation calculator, I see this has an equivalent buying power as $21,068 in 1984 USD. Am I correct in understanding that the median household income in 1984, represented in 1984 dollars, is $21,068?