宏观经济学学习笔记【2】生活水平的衡量-CPI
CPI - the consumer price index消费物价指数
a measure of the overall cost of the goods and services bought by a typical consumer.
how to calculate CPI:
(1)fix the basket. Setting diverse weights to different goods and services.
(2)find the prices. Find the price of each good in each year.
(3)compute the basket's cost. Compute the cost of the basket of goods in each year.
(4)choose a base year and compute the index.
Price of basket of goods and services in current year
CPI = -------------------------------------------------------------- *100
Price of basket in base year
(5)compute the inflation rate.
inflation rate y2 = ( CPI y1 - CPI y2 ) / CPI y1 * 100%
Three problems in gauging CPI
(1)substitution bias 替代偏好
If there were a variation in the price of some goods, people instinctively thought it worthwhile to buy other goods, thus, the goods in a basket need to change or it would overstate the increase of living from one year to the next.
(2)the introduction of new goods
it doesn't think of the possibility of the increase of purchasing power per unit currency caused by the intruduction of new goods.
(3)unmeasured quality change
If the quality deteriorated, the value of doller falls, vice versa.
