Consumers'opinion of inflation bias due to quality improvements

Abstrakt

The necessity to obtain accurate price measurements is particularly important in transition economies that need to restrain government revenues (and therefore tax rates) in order to promote economic growth at a time when political realities dictate large social programs, often indexed to inflation, to mitigate the effects of the transition. Upwardly biased measures of inflation that overstate apparent income declines during the transition will have clear domestic political consequences, reducing public support of necessary reforms and increasing political instability.

Klíčová slova

• consumers´opinion
• inflation bias
• quality improvements