Torie
Moderator
Atlas Legend
Posts: 46,056
Political Matrix
E: -3.48, S: -4.70
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« on: November 07, 2013, 06:19:58 PM » |
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Oh there have been a host of studies on this, and prior to a change in the way the CPI was calculated, it overstated the true inflation rate due to not adequately accounting for higher quality and changes in basket of goods one buy's as relative prices change, by 1% annualized to some say as much as 1.5%. After the change (I think it was in the 1970's, but don't hold me to that), the over-statment is more on the order of 0.5%. The Federal Reserve spends a lot of money doing these studies. It was one of Greenspan's favorite topics back when. The chained CPI concept for SS supposedly would get rid of all remaining overstatement bias - a bias that adds up over time when annually compounded.
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