Getting Prices Right: The Debate Over the Consumer Price Index

Dean Baker, Economic Policy Institute

M.E. Sharpe, 1998 - Business & Economics - 190 pages

Compiled by the Bureau of Labor Statistics, the CPI is used to index Social Security payments and many other federal programs, as well as to adjust tax brackets. Today, the accuracy of the CPI is being hotly debated, particularly in light of the Boskin Commission report that concluded in December 1996 that the CPI overstates inflation by 1.1%. If accepted and applied in the formulation of economic policy, the report would have major implications for balancing the federal budget. It would have a direct impact on the lives of Americans who are beneficiaries of government programs as well as on everyone who pays taxes. In this book, Dean Baker introduces and explains the significance of the debate, presents the full text of the Boskin Commission report and finally discusses in a far-reaching and insightful analysis both the Commission's research methodology and its conclusions.

Contents

• Indexing the Federal Budget: 14
• Quality Change and New Products: 29
• Estimates of Biases by Type and in Total: 50
• Conclusion: 65
• PART 2: 79
• The Evidence for an Overstated CPI: 95
• Is Inflation the Same for Everyone?: 125
• The CPI and a CostofLiving Index Compared: 131
• Is the CPI the Best Measure of Consumer Inflation?: 140
• The Record on Adjusting for CPI Bias: 148
• PART 3: 157
• Barry P Bosworth: 165
• Martin Feldstein: 171
• INDEX: 181
• ABOUT EPI: 189

About the author

Dean Baker is the cofounder of the Center for Economic Policy and Policy Research in Washington, DC. Before founding the center, he was a senior economist in Washington's Economic Policy Institute. He has authored or edited several books, including The Conservative Nanny State: How the Wealthy Use the Government to Stay Rich and Get Richer (2006), Social Security: The Phony Crisis (1999, with Mark Weisbrot), Getting Prices Right: The Debate Over the Consumer Price Index, which won a Choice book award as one of the outstanding academic books of 1998, and Globalization and Progressive Economic Policy (Cambridge University Press, 1998, coedited with Jerry Epstein and Bob Pollin). Dr Baker has also written for a variety of professional and general-audience publications. His work on economic policy issues is often cited in the media, and he is frequently interviewed on television and radio. Dr Baker has also testified a number of times before Congressional committees. He received his PhD in Economics from the University of Michigan.

Bibliographic information

• Title: Getting Prices Right: The Debate Over the Consumer Price Index; Economic Policy Institute
• Authors: Dean Baker, Economic Policy Institute
• Editor: Dean Baker
• Edition: illustrated
• Publisher: M.E. Sharpe, 1998
• ISBN: 0765602210, 9780765602213
• Length: 190 pages
• Subjects: Business & Economics / Economics / Microeconomics; Political Science / Public Policy / Economic Policy