Review

This article examines the role that the price indexing of benefits has played in creating financing problems, particularly in the short term. The article shows that the use of the consumer price index for indexing probably has overstated the benefit increases necessary to keep the purchasing power of benefits constant and that price indexing is inconsistent with the way benefits are funded. 

Inflation has caused many distortions that affect the affordability of housing, especially for first-time buyers. Since 1965, the price of the median-priced house in the United States has more than tripled. 

This article analyzes a frequently given cause of inflation—cost-push—within a monetary framework. The cost-push view of inflation is based on the notion that prices are set by the costs of production and that prices rise only when costs rise, regardless of demand.