Modernizing Price Measurement and Evaluating Recent Critiques of the Consumer Price Index

Excerpt:  “The consumer price index (CPI) plays a critical role in measuring inflation. Recent inflation trends, however, have raised questions about its accuracy. This paper evaluates several of these critiques, including that the CPI fails to keep up with rapid changes in consumer expenditure patterns; that its methodology is out of date; that the CPI does not correctly track the cost of housing; and that it does not keep up with rapidly changing products being purchased in the market.”