There have been a few. The latest one, during Clinton era,
was to replace arithmetic average with a geometric average.
It alone adds 4% to CPI. Then, there is hedonics. For
example, if you bought a computer in the early 90-s for $1000,
then in 2007 for $1000, the government calculates that you
paid 5c in 2007, not $1000, because of all the extra power
that you got. The same applies to cars, and everything else,
even food, where substitution is used. For example, if meat
prices double, the government thinks that you switch to
dog food, and then since the price of dog food is lower than
meat, there is deflation. -g- |
