ECON 22060 Lecture 4: Chapter 8
22 Jan 2019
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Document Summary
Computing the cpi: bls surveys, price information on over 8,000 goods and services each month, 211 categories, 38 geographical locations, also must estimate how each good impacts a typical consumer budget. Historical observations: the historical average inflation is about 4% Inflation was highest in and around the decade of the 1970s. Inflation was 14. 5% in the year between april 1979 and march 1980: since 1983, inflation has averaged less than 3, the only times that u. s. inflation rates were negative was during the recession of. Prices don"t all move together: clearly, most prices rise over time, travel, education, health care, however, some prices fall overtime, consumer electrons. Costs of inflation: shoe-leather costs, money illusion, nominal wage, real wage, menu costs, future price level uncertainty, wealth redistribution, price confusion, tax distortions. The cause of inflation: no debate on the cause of inflation.
