Joanna D asked in Social ScienceEconomics · 1 decade ago

Inflation measures in United States?

What are other measures of inflation in the United States other than the CPI?

3 Answers

  • 1 decade ago
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    Cost-of-living indices (COLI) are indices similar to the CPI which are often used to adjust fixed incomes and contractual incomes to maintain the real value of those incomes.

    # Producer price indices (PPIs) which measures average changes in prices received by domestic producers for their output. This differs from the CPI in that price subsidization, profits, and taxes may cause the amount received by the producer to differ from what the consumer paid. There is also typically a delay between an increase in the PPI and any eventual increase in the CPI. Producer price index measures the pressure being put on producers by the costs of their raw materials. This could be "passed on" to consumers, or it could be absorbed by profits, or offset by increasing productivity. In India and the United States, an earlier version of the PPI was called the Wholesale Price Index.

    # Commodity price indices, which measure the price of a selection of commodities. In the present commodity price indices are weighted by the relative importance of the components to the "all in" cost of an employee.

    # GDP deflator is a measure of the price of all the goods and services included in Gross Domestic Product (GDP). The US Commerce Department publishes a deflator series for US GDP, defined as its nominal GDP measure divided by its real GDP measure.

    # Core inflation because food and oil prices change quickly due to changes in supply and demand conditions in the food and oil markets, it can be difficult to detect the long run trend in price levels when looking at those prices. Therefore most national statistical agencies also report a measure of 'core inflation', which removes the most volatile components (such as food and oil) from a wider price index like the CPI. Since core inflation is less affected by short run supply and demand conditions in specific markets, it helps central banks better measure the inflationary impact of current monetary policy.

    # Regional inflation The Bureau of Labor Statistics breaks down CPI-U calculations down to different regions of the US.

    # True Inflation Index (TII), which measure a basic cost of survival on austere rations and is usually higher than RPI and CPI. It avoids errors of weighting for individuals and provides a baseline cost which will not reflect individual spending patterns above basic costs. This indicator is regularly published by The Daily Telegraph, and is the subject of a Downing Street Petition against misleading indices.

    # Historical inflation Before collecting consistent econometric data became standard for governments, and for the purpose of comparing absolute, rather than relative standards of living, various economists have calculated imputed inflation figures. Most inflation data before the early 20th century is imputed based on the known costs of goods, rather than compiled at the time. It is also used to adjust for the differences in real standard of living for the presence of technology.

    # Asset price inflation is an undue increase in the prices of real or financial assets, such as stock (equity) and real estate, can be called 'asset price inflation'. While there is no widely-accepted index of this type, some central bankers have suggested that it would be better to aim at stabilizing a wider general price level inflation measure that includes some asset prices, instead of stabilizing CPI or core inflation only. The reason is that by raising interest rates when stock prices or real estate prices rise, and lowering them when these asset prices fall, central banks might be more successful in avoiding bubbles and crashes in asset prices.

  • 1 decade ago

    Inflation is the variation between real costs and prices. Industrial and Technical Economics offer opportunities to create or examine models to demonstrate how markets can be influenced for control either politically or for commercial profit.

    Oil and petroleum prices are a classic example of inflationary manipulation. Quantity of available resources is constantly maneuvered to alter price.

    Current banking and financial markets have demonstrated flaws in the marketplace that can cause exploitation of the relationship between consumers and government.

    Consumer demand is the best measure of inflation. There are points at which desire for material resources diminishes.

  • 4 years ago

    # GDP deflator is a measure of the price of all the goods and services included in Gross Domestic Product (GDP). The US Commerce Department publishes a deflator series for US GDP, defined as its nominal GDP measure divided by its real GDP measure.

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