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> Or put another way, if fuel goes up astronomically and people buy less of it, they will adjust its weight downwards, limiting the effects of its price increas
by nuerow 5y ago
> Or put another way, if fuel goes up astronomically and people buy less of it, they will adjust its weight downwards, limiting the effects of its price increase on the headline inflation.
What problem do you see in that approach? That looks exactly like the expected behavior from the average consumer.
If your goal is to track the prices of goods and services actually consumed by the population, isn't it appropriate to lower the impact of goods and services that are consumed less by said population?
- efaref 5y agoThe goal is to track the relative price of goods consumed (the "Consumer Prices Index"). But if the way you're doing that basically ends up as "everyone is spending all of their wages", then your numerical value degrades to "how much wages do people have?".