The Problem of Short-term and Long-term Inflation Rate

This paper is engaged in the construction and interpretation of short-term time series of annual rate of inflation. The quarterly time series of the annual rates of inflation can be understood as the series of moving aggregates of the quarterly rates of inflation. When it is considered that the quarterly time series of annual rates of inflation measures price movements in individual quarters, it is very difficult to interpret and explain its values. The interpretation of the simple geometric means of every four subsequent quarterly rates of inflation in the time series is much easier. The problem of the interpretation of the quarterly time series of annual rates of inflation follows from the fact that this time series is the special form of the stationarizing transformation of consumer price indices. Very important fact is that this transformation is not method for seasonal adjustment of time series.