Alternative Measures of Price Inflation and the Perception of Real Income in Germany

32 Pages Posted: 2 Oct 2020

See all articles by Karl-Friedrich Israel

Karl-Friedrich Israel

Leipzig University - Institute for Economic Policy

Gunther Schnabl

University of Leipzig - Institute for Economic Policy

Date Written: 2020

Abstract

Since the 1980s inflationary pressures seem to materialize overproportionately outside of the sectors of consumer goods and services. We combine the Harmonized Index of Consumer Prices with indices for asset prices, such as stocks and real estate, as well as the costs of public goods to develop alternative inflation measures in Germany since the introduction of the euro. Real economic growth as well as median wage developments are reexamined in light of the alternative inflation estimates. Both turn out to be negative over the past decade in the most pessimistic scenarios.

Keywords: inflation, harmonized index of consumer prices, hidden inflation, assets prices, costs of public goods, inflation targeting, monetary policy, real wages, real economic growth, Germany

JEL Classification: E310, E520, E580, O110

Suggested Citation

Israel, Karl-Friedrich and Schnabl, Gunther, Alternative Measures of Price Inflation and the Perception of Real Income in Germany (2020). CESifo Working Paper No. 8583, Available at SSRN: https://ssrn.com/abstract=3703461

Karl-Friedrich Israel (Contact Author)

Leipzig University - Institute for Economic Policy ( email )

Grimmaische Str. 12
D-04109 Leipzig, 04109
Germany

Gunther Schnabl

University of Leipzig - Institute for Economic Policy ( email )

Institute for Economic Policy
Grimmaische Stra├če 12
Leipzig, 04109
Germany

HOME PAGE: http://www.wifa.uni-leipzig.de/iwp/

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