Review

The author first reviews the slowdown in consumption growth rates and then turns to the measures of current-dollar consumption expenditures—the numerator of the real consumption ratio. He then discusses the price statistics used for deflation, with particular attention given to the report of the CPI Commission (1996).

Commentary on "Measuring Consumption: The Post-1973 Slowdown and the Research Issues" by Jack E. Triplett.

The author discusses how theory might be used to better measure the quantities and prices of the commodities aggregated to form real consumption. He thinks a better definition of the real consumption of property and casualty insurance consumption is based upon a gross premium notion. He notes that significantly more resources should be devoted to improving the definition of real consumption in light of modern economic theory—because the social payoff to such an investment would be large, relative to the cost.

The author discusses how it is becoming increasingly apparent that changes in the key macro aggregates at cyclical and secular frequencies are best understood by tracking the evolution of the cross-sectional distribution of activity and changes at the micro level.

Commentary on "Measuring and Analyzing Aggregate Fluctuations: The Importance of Building From Microeconomic Evidence" by John C. Haltiwanger.

Commentary on "Measuring and Analyzing Aggregate Fluctuations: The Importance of Building From Microeconomic Evidence" by John C. Haltiwanger.

The author raises several concerns about the treatment of “quality” in the CPI. He notes that the right way to deal with problems in any measurement program, including the CPI, is to address each problem in its own right and apply the appropriate fix.

Commentary on "Quality Change in the CPI" by Charles R. Hulten.

Commentary on "Quality Change in the CPI" by Charles R. Hulten.

This article presents a new estimate of the magnitude of the across-strata effect in the CPI. It also proposes a method for picking the low-hanging fruit—that is, for publishing a real-time index substantially free of across-strata bias. 

Commentary on "Alternative Strategies for Aggregating Prices in the Consumer Price Index" by Matthew D. Shapiro and David W. Wilcox.

Commentary on "Alternative Strategies for Aggregating Prices in the Consumer Price Index" by Matthew D. Shapiro and David W. Wilcox.

As the focus of monetary policy shifts, it has become increasingly important to have accurate, reliable measures of inflation. This article examines the difficulties surrounding the measurement of the changes in the aggregate price level.

Commentary on "Measuring Short-Run Inflation for Central Bankers" by Stephen G. Cecchetti.

Commentary on "Measuring Short-Run Inflation for Central Bankers" by Stephen G. Cecchetti.

The author discusses problems with the measurement of the CPI, which he notes are not going to be fixed in the next revision. He further notes that quality change and new goods present two generic problems, one he calls “too late” and the other “too particular.”

The author presents the Bureau of Labor Statistics (BLS) perspective on bias in the CPI. He works his way through the main categories of potential bias in the CPI and mentions some BLS activities that address those problems. He notes that disagreements and controversy surround the problems’ relative importance, size, and—in some cases—direction.

The author discusses the use of the retail price index (RPIX) to inform U.K. monetary policy and then some of the general problems of measuring consumer prices and the implications for monetary policy.