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Thursday, May 22, 2008

The Distribution of Price Changes

It's interesting that there has been such a large increase in the number of prices that are currently falling, from 16% last month to 28% this month. Is this the Phillips curve at work?:

Digging deeper into the components that comprise the CPI, we can see that nearly 50 percent of the market basket rose at rates exceeding 3.0 percent in April, down slightly from 55 percent last month, but in line with price changes over the past 12 months. Also, 28 percent of the CPI components posted a decrease in price during the month, compared to 16 percent in March and an average of 20 percent over the past 12 months.

Infdist

More on inflation (first link) and the Phillips curve (second two links):

Hmmmmm, by Bill Gross

Explaining Apparent Changes in the Phillips Curve: The Great Moderation and Monetary Policy, Charles T. Carlstrom and Timothy S. Fuerst, Economic Commentary, Federal Reserve Bank of Cleveland

Explaining Apparent Changes in the Phillips Curve: Trend Inflation Isn't Constant, Charles T. Carlstrom and Timothy S. Fuerst, Economic Commentary, Federal Reserve Bank of Cleveland

    Posted by on Thursday, May 22, 2008 at 11:17 AM in Economics, Inflation | Permalink  TrackBack (0)  Comments (9)

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