Statistical offices use the matched models method to compile consumer price indices (CPIs) to measure inflation. The … substantial underestimates of inflation. Hedonic indices use the whole sample. They are argued to be more useful to price … measurement in markets with a rapid turnover of models in order to avoid the demonstrated bias …

In this paper we present supporting evidence of the existence of heterogeneity in inflation dynamics across euro area … significant inertial (backward looking) behavior in inflation in four of them, while inflation in Germany has a dominant forward … looking component. We then present an optimizing agent model for the area emphasizing the heterogeneity in inflation …

well as the improvements made to this measure of inflation since 2003 – finds that the HICP continues to fulfil the … replacement and quality adjustment. Such measures may also help reduce the measurement bias that still exists in the HICP. Overall …, a knowledge gap concerning the exact size of the measurement bias of the HICP remains, which calls for further research …