Acton Institute Powerblog

How do we measure inflation?

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Note: This is post #105 in a weekly video series on basic economics.

Inflation is an average rise in prices. But how exactly is this average rise in prices measured?

In this video by Marginal Revolution University, Alex Tabarrok explains how inflation in the United States can be measured using the Bureau of Labor Statistics’ Consumer Price Index (CPI)—a weighted average of the price increases. We can calculate the inflation rate by the percentage change in the CPI over a given period of time.

(If you find the pace of the videos too slow, I’d recommend watching them at 1.5 to 2 times the speed. You can adjust the speed at which the video plays by clicking on “Settings” (the gear symbol) and changing “Speed” from normal to 1.25, 1.5 or 2.)

Click here to see other videos in the Introduction to Economics series.

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Joe Carter Joe Carter is a Senior Editor at the Acton Institute. Joe also serves as an editor at the The Gospel Coalition, a communications specialist for the Ethics and Religious Liberty Commission of the Southern Baptist Convention, and as an adjunct professor of journalism at Patrick Henry College. He is the editor of the NIV Lifehacks Bible and co-author of How to Argue like Jesus: Learning Persuasion from History's Greatest Communicator (Crossway).

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