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quantitative skills

Inflation

An important concern of the economist is to be able to monitor the performance of an economy through time. One of the most important indicators of relevance here is inflation. But how do we measure and interpret this? Peter Smith explores some of the issues involved

In flation is seen as a key indicator of the performance of an economy, so you need a sound understanding of how it is measured and why it is important.

We can define inflation as the rate of increase in the average price level in an economy. So, in order to measure inflation, we need some way of measuring the average level of prices at different times, and a way of calculating how the average changes through time.

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Previous

Profits, patents and pharmaceuticals

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What is redistribution?

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