by Peter St Onge at Brownstone Institute
In this study we aim to quantify some of the more egregious biases in inflation statistics in order to get us closer to a true understanding of inflation since 2019, hence of true economic growth.
Introduction
Many have questioned the accuracy of official inflation statistics, with dozens of academic papers written on the topic and doubts voiced by sources ranging from the New York Times1 to former President Donald Trump.2
This matters not only because of the political salience of rising prices, but also because official inflation numbers are used to calculate real economic growth by adjusting nominal dollars to inflation-adjusted dollars.
In this study we aim to quantify some of the more egregious biases in inflation statistics in order to get us closer to a true understanding of inflation since 2019, hence of true economic growth since 2019.
Adjustments
The difficulty in measuring the size of a nation’s economy is two-fold.3 First,…