I was looking at some old data to see if there is any correlation between gold prices and per capita income in India. There are two graphs which I made over this. The first is the increase in gold price and per capita income having the value for both in 1970 as 1. Both of them follow the same path, with gold slightly above the income graph. But, one important thing, the pay commissions (1973, 1983, 1994, 2006, 2016) gave a sudden spike in the take home income and we see gold prices dipping around the same period.
The second one is the quantity of gold a person can buy based on his monthly wages. It looks as if this range is boxed between 2 grams and 4 grams, with the economic chaos of 1970s creating a steeper dip.
The inference is, at least with respect to gold, a person’s salary didn’t change much. May be, it’ll be the same with house rent or CPI index?
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