Temporary supply factors may boost some commodity prices—a drought in the Midwest can jolt food costs, or a conflict in the Middle East might propel oil higher. These, in turn, can increase the overall consumer price index (CPI) and the headline inflation rate. ; Because central bank...

According to consumer price measures like the CPI, inflation has recently jumped up a notch. What those measures don’t tell us is whether the increase will persist. In this Commentary, we look at a measure that does. The measure incorporates data on past inflation rates, surveys of expected...

Remarks at the Center for the New Economy 2010 Economic Conference, San Juan, Puerto Rico.

Once a business opts to purchase rather than produce an input, it can also change the source from which the product is procured. Producer price index programs face problems in dealing with price changes associated with sourcing changes. We present measures for price index bias due to sourcing...

The consumer price indexes for the entire country and those for individual households are weighted arithmetic averages of relative prices, and they differ essentially in terms of their weighting systems. Whereas the former use the proportions of total expenditure on goods and services, the...

In situations where groups of economic time series are likely to have seasonal dynamics in common, use of seasonal information across series in estimating their seasonal factors should improve the seasonal factor estimates for individual series. Such information sharing can also be the basis for...

Critics of the consumer price index--the most widely watched inflation measure--contend that it overstates inflation by as much as 1 percentage point a year. Some have argued that alternative indexes eliminate the CPI's upward bias and offer a more accurate reading of inflation levels. A closer...

Some argue that social security benefits should be adjusted using a price index that reflects the spending habits of the elderly rather than those of workers. This study suggests that if such an index were adopted today, over the next forty years benefit levels would increase and the social...

The large swings in world food prices in recent years renew interest in the question of how monetary policy in small open economies should react to such imported price shocks. We examine this issue in a canonical open economy setting with sticky prices and where food plays a distinctive role in...