Author (Person) | Frale, Cecilia, Mortensen, Jørgen |
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Publisher | Centre for European Policy Studies [CEPS] |
Series Title | CEPS Working Document |
Series Details | No.306, 2008 |
Publication Date | 17/10/2008 |
Content Type | Journal | Series | Blog |
From Source URL click on 'Download the document (PDF) for FREE'. The recent surge in commodity prices and the European Central Bank’s decision in June to raise interest rates to combat inflation have ignited a debate about the appropriateness of raising interest rates during a phase of weakening activity. In addition, it is relevant to examine the approaches to measuring the rate of inflation, to consider the advantages and drawbacks of these methods, and finally to throw new light on the possible influence of monetary policy on the fundamental trends in prices. This paper presents a critical review of the methods of measuring inflation for the euro area and the US, analysing i) the adequacy of the consumer price index (CPI) weighting scheme, ii) the different definitions of inflation used on the two sides of the Atlantic, iii) the drawbacks of the current measures in the face of changing times and iv) some alternatives for the inflation computation. |
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Source Link | Link to Main Source http://aei.pitt.edu/11656/1/1739.pdf |
Subject Categories | Economic and Financial Affairs |
Countries / Regions | Europe |