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Political Factoid
In 1999, the government bureaucrats revised
the method they use to calculate inflation.
- The original method computed inflation by comparing
the change in prices when purchasing a fixed
amount of goods (i.e., a constant shopping list.)
- Now, they assume that consumers will always spend
the same amount of money on a good and vary
the quantity they buy of that good based on the price.*
(i.e., a constant budget.)
| * |
That is like always buying the
same dollar amount of milk, or
same dollar amount of bread,
at the grocery.
This week I must buy 1.13 gallons of milk
and 0.92 loaf of bread and 1.15 whole
chickens.
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cf.
1493,
1503
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-30-
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