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Don't confuse the CPI with the 'core inflation' measure.
http://en.wikipedia.org/wiki/Core_inflation
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The older preferred measure of inflation in the United States was the Consumer Price Index. This is still used as the indicator for most other countries, and is presented monthly in the US by the Bureau of Labor Statistics. This index tends to change more on a month to month basis than does "core inflation". This is because core inflation eliminates products that can have temporary price shocks (i.e. energy, food products). Core inflation is thus intended to be an indicator and predictor of underlying long-term inflation.
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Except of course, by removing the products that supposedly have short term volitility but are also very inflationary in the long term, you bias down the resulting number.
Not to mention goods substitution, which has got to be the craziest bunch of [censored] Alan Greenspan ever came up with.
"Well, as prices of the things in the basket of goods increase, the rational consumer will substitute other, cheaper goods, so we should too in our calculations."
No, that's not intended to falsify the inflation numbers AT ALL . . .
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yea, they didn't come up with that after study after study proved that inflation was upwardly biased or anything. they clearly had the sole intention of biasing the inflation figures downward. and it isn't like that's the only source of upward bias (i.e. not substituting) or anything either...
if you'd like i can find and cite the studies that don't come from the federal reserve board or any govt agency or think tank.
Barron
NOTE: i'm not saying that the fed or other federal agencies/govt's aren't downwardly biasing inflation, only that they didn't form a cabal to get together and decide to do it willy nilly. they had a chioce: an upwardly biased inflation figure, or a downwardly biased inflation figure. they chose the latter for whatever nafarious reason you assign them.