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The effects of rounding on the Consumer Price Index.

The article explains the effects of rounding the Consumer Price Index (CPI) in the U.S. Calculating percent changes in a price index rounded to three decimal places mitigates a problem that can arise when percent changes are based on the same index rounded to a single decimal place. Because the actu...

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Publicado en:Monthly Labor Review Vol. 129; no. 10; pp. 80 - 90
Autor principal: Williams, Elliot
Formato: Artículo
Publicado: US Department of Labor Oct2006
Materias:
United States
Price inflation
Economic indicators
Consumer price indexes
Price indexes
United States economy
Acceso en línea:Ver este registro en EBSCOhost
Sumario:The article explains the effects of rounding the Consumer Price Index (CPI) in the U.S. Calculating percent changes in a price index rounded to three decimal places mitigates a problem that can arise when percent changes are based on the same index rounded to a single decimal place. Because the actual changes in the CPI have been quite small recently (the rate of inflation has been relatively low), the small differences incurred in rounding up or down can create a misleading picture of monthly price inflation.