Question
Why is it that the people responsible for pensions use the CPI as an indicator for inflation rather than the GDP deflator? Why is the CPI better?
what is rconimics
I believe the biggest reason is the base for each measures. CPI measures the weighted average change in prices for a market basket of consumer goods + services. The GDP deflator measures changes in prices of all goods+services included in GDP including investment and government spending.
what is rconimics
I believe the biggest reason is the base for each measures. CPI measures the weighted average change in prices for a market basket of consumer goods + services. The GDP deflator measures changes in prices of all goods+services included in GDP including investment and government spending.