ISSN (Print) - 0012-9976 | ISSN (Online) - 2349-8846
Reader Mode
-A A +A

Issues in Measurement of Inflation Targeting

The current practice of measuring the inflation rate from fixed base weight index is outdated and likely to overstate inflation substantially compared to the chain weighted index used in developed countries. Similarly, the treatment of house rent allowance revisions to estimate the housing Consumer Price Index also significantly overstates the headline inflation. Economy-wide inflationary expectations also need proper measurement. Inflation-targeting framework without proper measurement of inflation rate can involve very high real costs and make the policy counterproductive.



Subscribers please login to access full text of the article.

New 3 Month Subscription
to Digital Archives at

649for India

$20for overseas users

Get instant access to the complete EPW archives

Subscribe now

Updated On : 19th Nov, 2018

Comments

(-) Hide

EPW looks forward to your comments. Please note that comments are moderated as per our comments policy. They may take some time to appear. A comment, if suitable, may be selected for publication in the Letters pages of EPW.

Back to Top