4 ms·
Why Is the Consumer Price Index Controversial?
- jjgreen 4y agoQuite a bit of technical content there, but the key property of CPI is that it uses the geometric mean rather than the arithmetic [1]. The reason why this is done is clear once you know this inequality: [2] [1] https://touchstoneblog.org.uk/2010/06/the-difference-between-an-arithmetic-mean-and-a-geometric-mean-and-why-it-matters/ https://touchstoneblog.org.uk/2010/06/the-difference-between... [2] https://en.wikipedia.org/wiki/Inequality_of_arithmetic_and_geometric_means https://en.wikipedia.org/wiki/Inequality_of_arithmetic_and_g...
- berenza 4y agothere's a recently developed alternative inflation measure here that looks rather good. https://app.truflation.com/ https://app.truflation.com/