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The CPI is used to measure inflation.

MonetaryOffset
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10/29/2014 6:52:50 AM
Posted: 2 years ago
At 10/29/2014 1:11:34 AM, hotnicey wrote:
Do you agree or disagree that the CPI is and accurate measure of a typical consumer?

It's a flawed measure of inflation, to be honest. There are a lot of problems with it, mainly that it doesn't factor in the substitution effect or innovation -- i.e., Iphone 5 may cost as much as the Ipone 1 did a few years ago. The BLS attempts via hedonics to rectify this, but ultimately PCE is a far superior measure. The spread between the two is usually 30 to 40 basis points, anyway; e.g., core CPI is at 1.72 percent right now, and core PCE is at 1.46 percent.
~JMK

9:43 P.M. EST, Nov 5, 2014: I became a basic white girl.