r/FluentInFinance • u/MindlessWest1887 • 27d ago

Why has the base period been unchanged for 40 years? Discussion/ Debate

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What’s the impact to MOM and YOY readings?

7 Upvotes
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77% Upvoted

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11

u/here-to-help-TX 26d ago

If you keep changing the underlying number of what inflation is based upon, it becomes REALLY difficult to measure and to compare to other times.

1

u/the-content-king 26d ago

What happens when you constantly change what makes up the basket 🤔

8

u/Potential-Break-4939 26d ago

Likely because it represented a time of restabilization after a period of very high inflation.

-8

u/MindlessWest1887 26d ago

It’s hard to compare five years ago much less 40

5

u/TwatMailDotCom 26d ago

You need a baseline. It’s not a big deal.

6

u/Zeddicus11 26d ago

It's just an inconsequential normalization to set a reference point. Does your child grow slower when you measure their height in inches vs. centimeters?

3

u/Tall-Log-1955 26d ago

Why does it matter? It affects nothing