Is there a better (more accurate) method than the current method of calculating CPI's based on numbers of arbritralily chosen factors? If so - what is it?
Is it really necessary to measure inflation? Is the obsession with inflation that we have a result of the trust people (mis)placed in the Phillips curve until the eighties? Now that most economists no longer think the Phillips curve is an accurate yardstick in the fight to hold down unemployment - is there any reason for us to measure inflation?
Maybe there is, now that there is a Central Bank that issues money and regulates the quantity thereof - if it is to make (relatively) accurate decisions regarding the quantity of money in circulation it is better off knowing the appriximate levels of inflation.
If there were no one institution or Bank who could issue money - if anyone and everyone could issue money - would we then need to know the levels of inflation? And if we knew - would it do any good?
Answers and comments would be very much appreciated.
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From Statistics Iceland:
The Harmonized Indices of Consumer Prices average for member countries of the European Economic Area (EU-countries, Iceland and Norway) was 115.5 points (1996=100) in June, remaining unchanged from May. At the same time, the HICP for Iceland was 128.9 points, 0.5% higher than in the previous month.
The 12-month rate of change of the HICP was 2.3% for the EEA, 2.4% for the Euro-zone while it was 2.9% for Iceland.
The highest inflation rate in the EEA in this twelve month period was 8.1% in the Slovak Republic and 7.5% in Hungary. In Finland the consumer prices went down by 0.1% while the inflation rate was 0.9% in Denmark.
Click image to enlarge
