Do the central banks look at the right target when measuring inflation? In an interview with the German magazine "Wirtschaftswoche", Prof. Volker Wieland makes the case for taking into account other inflation measures such as the GDP deflator.
The GDP deflator measures the prices of all goods and services produced in the euro area. Capital goods, which are not taken into account into the consumer price index, are also included in the GDP deflator. "This is an inflation development that is completely ignored by the ECB," Wieland criticized.
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