How mismeasuring inflation fuels the housing crisis: an interview with Kareem Kudus

Generation Squeeze's Hard Truths

Inflation seems like big news lately, but runaway inflation has been around for decades when it comes to housing prices in Canada. Gen Squeeze volunteer Kareem Kudus joins Umair and Megan to discuss how mismeasuring housing inflation has contributed to soaring home prices. Since 2005, home prices have risen about 300 per cent on average across the country. But the housing component of the Consumer Price Index -- which we use to measure inflation in Canada -- has only gone up 60 per cent. "So it's completely disassociated from reality," Kareem explains. Fixing this faulty monetary policy will help make homes affordable for younger and future Canadians.

Kareem Kudus began his career in finance, where his job involved developing investment strategies by studying financial markets and the economy. Through this experience, he began to recognize that our economic system is both less efficient and less fair than it has the potential to be, oftentimes due to well-meaning policies with unintended consequences. Kareem left finance to study artificial intelligence and its applications to the medical field. He is working with Generation Squeeze to try and apply the knowledge he gained in his former career in order to find solutions to Canada's economic issues.

Dig deeper:

• Full episode transcript
• Kareem's Gen Squeeze blog posts about inflation:

1. Should Canadians concerned about high and rising home prices welcome high gas prices?
2. Budget 2022 doesn’t fix the poor job Canada’s inflation measure does at representing our biggest source of inflation
3. Statistics Canada proposes sticking with the status quo – no need to change harmful mismeasurement of housing price inflation
4. We have tolerated homes becoming more unaffordable by mismeasuring inflation