Who really knows the rate of inflation (hint – not government) ?

Much talk around Europe is on the worries of inflation or deflation. Part of the problem in assessing this is that inflation statistics are stale. They are collected on the basis of representative baskets of goods and are published with a delay. For Ireland the basket of goods was updated in 2007 and then again in 2012. Basket composition issues can lead to changes in the apparent inflation rate.

Wouldn’t it be nice if we had realtime inflation? Where we could see, on a day to day basis, inflation and deflation in key sectors? Well, we can, IF we pay. A company collects these data, for a vast number of countries and for a large amount of sectors. Ireland is included. In fact, in 2009 the originator of this gave a talk at a conference in Ireland.

But we don’t know. State Street in the IFSC know. They are partners with the company. But written responses from the government are clear : the Irish state does not collect nor does it purchase these data. Why is that?

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3 thoughts on “Who really knows the rate of inflation (hint – not government) ?

  1. Pingback: Who really knows the rate of inflation (hint – not government) ? | Machholz's Blog

  2. Shaun Richards (@notayesmansecon)

    Hi Brian
    Whilst I am a critic of some of the UK’s inflation infrastructure (such as the debacle around housing costs and the CPI) on my Notayesmanseconomics blog this is an area where the UK Office for National Statistics puts in a better performance.
    “At the beginning of each year the weights used to compile both the CPI and RPI
    are updated using the latest available information on household spending.”
    “Annual updates to the weights are necessary to ensure that the CPI and RPI remains
    representative of current household expenditure patterns. In addition, weights also need to
    be updated to reflect the introduction of new items and the removal of old ones.”
    It is certainly better than the five year updating which is more common in Europe.
    As to daily updating whilst it looks initially attractive the danger is of it being very frenetic and erratic don’t you think?

    Reply

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