17 Pages Posted: 14 Dec 2006
Date Written: October 2006
Inflation measurement is the process through which changes in the prices of individual goods and services are combined to yield a measure of general price change. This paper discusses the conceptual framework for thinking about inflation measurement and considers practical issues associated with determining an inflation measure's scope; with measuring individual prices; and with combining these individual prices into a measure of aggregate inflation. We also discuss the concept of "core inflation," and summarize the implications of inflation measurement for economic theory and policy.
Keywords: Index numbers, price indexes, cost-of-living index
JEL Classification: G43, E31
Suggested Citation: Suggested Citation