IDEAS home Printed from https://ideas.repec.org/a/fip/fedker/y1997iqip11-30nv.82no,1.html
   My bibliography  Save this article

U.S. inflation developments in 1996

Author

Listed:
  • Todd E. Clark

Abstract

The primary goal of Federal Reserve monetary policy is to foster maximum long-term growth in the U.S. economy by achieving price stability over time. Price stability will be achieved, according to some definitions, when inflation ceases to be a factor in the decision-making processes of businesses and individuals. Although the Federal Reserve has made considerable progress toward price stability since the early 1980s, inflation remains above the level most analysts would associate with price stability. Because stable prices are essential to maximum long-term economic growth and living standards, the Federal Reserve seeks to contain and gradually reduce inflation until price stability is attained.> Clark reviews inflation developments in the United States during 1996 in relation to the Federal Reserve's goal of achieving price stability over time. He first examines the behavior of inflation over the past year, showing that sharp increases in food and energy prices caused most overall inflation measures to rise, while inflation in nonfood and nonenergy prices slowed. Second, he shows that expectations of future inflation held steady at about the current rate, indicating the public expects no further progress toward price stability. Finally, he evaluates some inflation measurement issues raised in 1996, concluding that problems in accurately measuring inflation will require the Federal Reserve to monitor all price trends with vigilance. Together, the inflation developments of the past year were mixed.

Suggested Citation

  • Todd E. Clark, 1997. "U.S. inflation developments in 1996," Economic Review, Federal Reserve Bank of Kansas City, issue Q I, pages 11-30.
    • Handle: RePEc:fip:fedker:y:1997:i:qi:p:11-30:n:v.82no,1
    as

    Download full text from publisher

    File URL: https://www.kansascityfed.org/documents/1436/1997-U.S.%20Inflation%20Developments%20in%201996.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Brent R. Moulton, 1996. "Bias in the Consumer Price Index: What Is the Evidence?," Journal of Economic Perspectives, American Economic Association, vol. 10(4), pages 159-177, Fall.
    2. Wynne, Mark A & Sigalla, Fiona D, 1996. "A Survey of Measurement Biases in Price Indexes," Journal of Economic Surveys, Wiley Blackwell, vol. 10(1), pages 55-89, March.
    3. Paul E. Pieper, 1991. "The Measurement of Construction Prices: Retrospect and Prospect," NBER Chapters, in: Fifty Years of Economic Measurement: The Jubilee of the Conference on Research in Income and Wealth, pages 239-272, National Bureau of Economic Research, Inc.
    4. Zvi Griliches, 1992. "Output Measurement in the Service Sectors," NBER Books, National Bureau of Economic Research, Inc, number gril92-1.
    5. Matthew D. Shapiro & David W. Wilcox, 1996. "Mismeasurement in the Consumer Price Index: An Evaluation," NBER Chapters, in: NBER Macroeconomics Annual 1996, Volume 11, pages 93-154, National Bureau of Economic Research, Inc.
    6. Stuart E. Weiner, 1995. "Challenges to the natural rate framework," Economic Review, Federal Reserve Bank of Kansas City, vol. 80(Q II), pages 19-25.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Hoffmann, Johannes, 1998. "Problems of inflation measurement in Germany," Discussion Paper Series 1: Economic Studies 1998,01e, Deutsche Bundesbank.
    2. Ernst R. Berndt & David M. Cutler & Richard Frank & Zvi Griliches & Joseph P. Newhouse & Jack E. Triplett, 2001. "Price Indexes for Medical Care Goods and Services -- An Overview of Measurement Issues," NBER Chapters, in: Medical Care Output and Productivity, pages 141-200, National Bureau of Economic Research, Inc.
    3. Shiratsuka, Shigenori, 1999. "Measurement Errors in the Japanese Consumer Price Index," Monetary and Economic Studies, Institute for Monetary and Economic Studies, Bank of Japan, vol. 17(3), pages 69-102, December.
    4. Ben S. Bernanke & Frederic S. Mishkin, 1997. "Inflation Targeting: A New Framework for Monetary Policy?," Journal of Economic Perspectives, American Economic Association, vol. 11(2), pages 97-116, Spring.
    5. Takatoshi Ito & Frederic S. Mishkin, 2006. "Two Decades of Japanese Monetary Policy and the Deflation Problem," NBER Chapters, in: Monetary Policy with Very Low Inflation in the Pacific Rim, pages 131-1997, National Bureau of Economic Research, Inc.
    6. Robert J. Gordon, 2000. "The Boskin Commission Report and its Aftermath," NBER Working Papers 7759, National Bureau of Economic Research, Inc.
    7. Charles Hulten & Leonard I. Nakamura, 2020. "Expanded GDP for Welfare Measurement in the 21st Century," NBER Chapters, in: Measuring and Accounting for Innovation in the Twenty-First Century, pages 19-59, National Bureau of Economic Research, Inc.
    8. Kovács, Ilona, 2003. "A fogyasztói árindex torzító tényezői [Distorting factors in the consumer price index]," Közgazdasági Szemle (Economic Review - monthly of the Hungarian Academy of Sciences), Közgazdasági Szemle Alapítvány (Economic Review Foundation), vol. 0(7), pages 702-719.
    9. Frederic Mishkin & Klaus Schmidt-Hebbel, 2002. "A Decade of Inflation Targeting in the World: What Do We Know and What Do We Need to Know?," Central Banking, Analysis, and Economic Policies Book Series, in: Norman Loayza & Raimundo Soto & Norman Loayza (Series Editor) & Klaus Schmidt-Hebbel (Series Editor) (ed.),Inflation Targeting: Desing, Performance, Challenges, edition 1, volume 5, chapter 4, pages 171-220, Central Bank of Chile.
    10. Angus Deaton, 1998. "Getting Prices Right: What Should Be Done?," Journal of Economic Perspectives, American Economic Association, vol. 12(1), pages 37-46, Winter.
    11. John S. Greenlees, 1997. "A Bureau of Labor Statistics perspective on bias in the consumer price index (panel discussion)," Review, Federal Reserve Bank of St. Louis, issue May, pages 175-178.
    12. Frederic S. Mishkin & Klaus Schmidt-Hebbel, 2001. "One Decade of Inflation Targeting in the World: What Do We Know and What Do We Need to Know?," NBER Working Papers 8397, National Bureau of Economic Research, Inc.
    13. Martha López, 2006. "Algunos Criterios Para Evaluar Una Meta De Inflación De Largo Plazo," Borradores de Economia 1967, Banco de la Republica.
    14. James Gorry & Dean Scrimgeour, 2018. "Using Engel Curves To Estimate Consumer Price Index Bias For The Elderly," Contemporary Economic Policy, Western Economic Association International, vol. 36(3), pages 539-553, July.
    15. David Wasshausen & Brent R. Moulton, 2006. "The Role of Hedonic Methods in Measuring Real GDP in the United States," BEA Papers 0067, Bureau of Economic Analysis.
    16. Alan B. Krueger & Aaron Siskind, 1997. "Assessing Bias in the Consumer Price Index from Survey Data," Working Papers 771, Princeton University, Department of Economics, Industrial Relations Section..
    17. Charles R. Hulten, 1997. "Quality change in the CPI," Review, Federal Reserve Bank of St. Louis, issue May, pages 87-100.
    18. Jack E. Triplett, 2001. "What's Different about Health? Human Repair and Car Repair in National Accounts and in National Health Accounts," NBER Chapters, in: Medical Care Output and Productivity, pages 15-96, National Bureau of Economic Research, Inc.
    19. Gordon, Robert-J, 1999. "The Boskin Commission Report and Its Aftermath," Monetary and Economic Studies, Institute for Monetary and Economic Studies, Bank of Japan, vol. 17(3), pages 41-68, December.
    20. Brent R. Moulton & Karin E. Moses, 1997. "Addressing the Quality Change Issue in the Consumer Price Index," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 28(1), pages 305-366.

    More about this item

    Keywords

    Inflation (Finance); Prices;

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:fip:fedker:y:1997:i:qi:p:11-30:n:v.82no,1. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Zach Kastens (email available below). General contact details of provider: https://edirc.repec.org/data/frbkcus.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.