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Is inflation understated? Is inflation understated?
No, inflation is overstated No, inflation is overstated
Yes, inflation is understated Yes, inflation is understated
Inflation is accurate, but ignores varying demand elasticity among its components Inflation is accurate, but ignores varying demand elasticity among its components
A 'theoretical fixed basket' doesn't reflect what people buy A 'theoretical fixed basket' doesn't reflect what people buy
Shift in what is relevant to the CPI Shift in what is relevant to the CPI
Rise in quality causes inflation to be overstated Rise in quality causes inflation to be overstated
The Government ensures inflation is understated The Government ensures inflation is understated
Quality adjustments cause inflation to be understated Quality adjustments cause inflation to be understated
Inflation indices do not reflect reality Inflation indices do not reflect reality
Inflation is multi-dimensional. Inflation is multi-dimensional.
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Is inflation understated?
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Yes, inflation is understated

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Inflation is multi-dimensional.

Representative basket of goods varies by geography and income bracket. There should be thus multiple inflation numbers reflecting this.
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This page was last edited on Tuesday, 28 Jan 2020 at 14:42 UTC

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