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Is the CPI flawed?
Tim Hope on 12/9/2010 5:02:00 PM
The trailing inflation rate as measured by the Consumer Price Index (CPI) is under 2% over the past year. Yet, many commodities have exploded in price over the same time period. This is troublesome given that they represent food and clothes for consumers and also industrial inputs for manufacturers. As the CPI remains at such low levels despite large increases across many commodity categories, one may wonder if the methodology used to calculate the Index is flawed.
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