Macroeconomics: UK economy, IB Economics

An IFS podcast, I guess, looking at inflation in the UK, whether or not, as a construct, it does the job we want it to, and the difficulties of measuring it.

It's standard fare but a good introduction to a key macroeconomic objective, nonetheless. 

This is a brilliantly simple illustration of why, in certain circumstances, such as today's macroeconomic environment, inflation is a flawed measure of the average price level in an economy. 

The consumer bundle is still taking into account the cost of foreign holidays and cinema tickets. Excuse me? 

It's interesting to see that the ONS has responded to the criticism that current measures of inflation aren't representative by blogging and saying that it is looking at broadening measures of inflation to include many more data points - using supermarket checkout data - and thus hopefully capturing more of the price changes in food. At the moment, the current measure seems to discriminate against the lowest income consumers.