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Classic approach would be: You have an inflation rate (measured through a time series of Consumer Price Indices) for a given timeframe and an initial amount of
by fwn 10y ago
Classic approach would be:
You have an inflation rate (measured through a time series of Consumer Price Indices) for a given timeframe and an initial amount of money. Multiply it.
It's just to compare purchasing power over time.
- Ntrails 10y agoExpanding with an example... Really you just want to use the index itself. It represents (in theory) the amount you'd pay for a basket of goods. So say, for example, the Index was at 240 in 1992, but today that same index is 360. So for £100 of 1992 money in today's terms you'd do: 360/240 * 100 = £150 Essentially you just want the ratio of prices for the basket of goods.
- Jaruzel 10y agoThat's a great example, thank you. Where do I find the index numbers you refer to? I've googled, but stats are really not my strong point.
- richdougherty 10y agoAssuming you're in the US, you could look here: http://www.bls.gov/data/#prices http://www.bls.gov/data/#prices More information here (https://en.wikipedia.org/wiki/Consumer_price_index https://en.wikipedia.org/wiki/Consumer_price_index), including info about the appropriate US index to use.