Current Issues in Economics and Finance
The Unreliability of Inflation Indicators
April 2000 Volume 6, Number 4
JEL classification: E31, E37

Authors: Stephen G. Cecchetti, Rita S. Chu, and Charles Steindel

Analysts seeking evidence of rising inflation often focus on the movements of a single indicator-an increase in the price of gold, for example, or a decline in the unemployment rate. But simple statistical tests reveal that such indicators, used in isolation, have very limited predictive power.

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