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| The "digital price index" captures online purchases but misses key goods such as petrol. Bloomberg |
Inflation is a simple concept, but price rises are surprisingly hard to measure. First, statisticians must work out what stuff people buy, and in what proportions (the "basket" of goods). Then they must track the prices of those goods over time. Finally they must decide how to account for new products, changing tastes and the fact that if the price of, say, apples rises, some people will buy another fruit instead rather than pay more.
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