Inflation

Abstract

There are several ways in which inflation can be measured. The most common is by reference to a consumer price index (CPI) which measures the changes in prices of a basket of goods and services purchased by a representative set of households. The CPI is a narrow measure of inflation and does not measure changes in the prices of other goods and services, such as those used for intermediate consumption or the prices of capital products. A much broader indicator of inflation is provided by the GDP deflator, and this is the inflation measure shown here.