alibomics

There is much talk about inflation in the media in recent times. “Radioteleconomists” have presented different and ofthen misleading interpretations in discussions. This piece  seeks to present the subject from a somewhat informed perspective. Inflation, properly defined is a continuous increase in the general price level in an economy over a given period of time. It is calculated by measuring how prices of selected goods and services change over a given time. So if the rate of inflation is 10% for a given month, it means that the price level of all the goods under consideration have increased by 10% over the level of the previous year’s corresponding month. So say, January last year against January this year. Assuming that it costed 100Cedis to buy a set of 20goods under consideration (i.e.CPI basket) in January 2011, it now cost 110Cedis to buy the same set of goods in January 2012. The price increase should however not be due to improved quality. An improvement in quality would