Inflation: The Unusual Suspects
Published in Business Line on Apr 07
It is never recognized that Central Banks are the Causual factors behind Inflation. In fact, Central Banks were formulated for the very purpose of creating Inflation. However, the general perception is that Central banks are the guardians against Inflation.
This article shows some of the popular misconceptions in the way we calculate Inflation allowing Central Banks to maintain this Inflation-Fighters image.
posted by Shanmuganathan N @ 3:47 AM
1 comments
1 Comments:
Quite a thought-provoking piece.The author,inter alia,wonders why inflation should measure only movement in prices of commodities and not financial assets and real estate.There could be two reasons for this.
One,we expend only on commodities whereas we invest in financial assets and real estate.Secondly,consumption is unavoidable;investment is discretionary.Of course,there are indices which capture movement in prices of financial assets and real estate.
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