Let's End Our Inflation Obsession

It's one for Ripley's Believe It or Not. Despite super-duper 4.2% growth in the third quarter, the inflation rate as measured by the Consumer Price Index fell to a paltry 1.8% for the quarter. Given that the CPI index probably overstates inflation by 0.5% to 1%, the economy is edging toward a new kind of disinflationary growth. Nearly five years into economic expansion, inflation continues to fall. This is big news. Standard economics tells us that this is nigh impossible.

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