Correlations: Inflation Rates' Reality Check

A reality check for government inflation rates

“Lies, damned lies, and statistics,” goes an old saw of uncertain provenance. In many countries, it’s an open secret that monthly inflation figures released by governments are fiction. North Korea’s communist regime doesn’t even bother putting out numbers. Steve Hanke, a Johns Hopkins professor who is also a senior fellow at the Cato Institute, has attempted a reality check, using data on black market currency exchange rates. That’s a sensible approach since a rapidly depreciating currency is one of the main drivers of inflation.

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