And What Do We Want a CPI For?

Abstract

The current discussion about the problems at the INE (National Statistics Institute) and, in particular, about the consumer price index (CPI) has turned into a veritable jumble of opinions. But the underlying question is the one in the title of this article. The CPI is simply a statistic that records the behavior of the prices of a “basic” set of goods and services consumed by households in the country. It is basic because an enormous number of goods and services is left out for various reasons, essentially because of the difficulty of collecting information on a regular basis and/or their limited weight in the household budget. Continue reading...