I often read things where it will say something like “It cost X$ in 1970, the equivalent of Y$ today”. Or the other way around. Is it tied into a single thing, like the price of gold? Or is it something more esoteric like the Federal interest rate? Do all sources figure it the same way? How accurate is it? I.E. if it is tied to the price of gold or something, can you look back and see that that was the price of a loaf of bread?
In: Economics
We know what items/services/etc cost historically, and can calculate based on that.
(I’m going to make up numbers out of laziness here, so don’t take them too seriously)
If we say the living costs for a single adult today is about $2000/month, and have records that the cost in 1960 was $500, we can say that
$500[1960]=$2000[2020]
Some basic math gives us the relative value is a single dollar
$500/500[1960]=$2000/500[1960]
$1[1960]=$4[2020]
Knowing that, you can now figure out the relative value of *anything* sold in 1960. $100 car? $4000 today. $1.5 million yacht? $6 mill today. Etc.
Again, numbers totally imaginary here, but that should give you the idea.
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