Academic journal article Economic Review - Federal Reserve Bank of Kansas City

Alternative Inflation Measures

Academic journal article Economic Review - Federal Reserve Bank of Kansas City

Alternative Inflation Measures

Article excerpt

ALTERNATIVE INFLATION MEASURES

Policymakers, businesses, and individuals find a number of inflation measures to be useful. These include the consumer price index, the chain-Weighted price index for GDP, and the producer price index. The CPI and the GDP price index track final goods and services, measuring the prices of items sold to the final user. The PPI tracks prices of goods at different stages of production, from the very earliest stage to the finished stage.

More specifically, the consumer price index tracks the average change in the prices of a fixed set of goods and services purchased by the typical consumer. The all-items CPI, known simply as the CPI, measures the average price change of all goods and services. More specialized indexes of consumer prices are also available. The core CPI measures the prices of nonfood and nonenergy goods and services. The exclusion of food and energy prices, which tend to be highly volatile, can sometimes help make underlying inflation trends more apparent. The CPI and core CPI are the most commonly cited measures of inflation because they come closest to tracking changes in the cost of living of the average U.S. resident.

The chain-weighted price index for GDP measures the average price change for all final goods and services produced in the United States. …

Search by... Author
Show... All Results Primary Sources Peer-reviewed

Oops!

An unknown error has occurred. Please click the button below to reload the page. If the problem persists, please try again in a little while.