A Faster Measure of Inflation

Alberto Cavallo MBA ’05, Faculty
Roberto Rigobon PhD ’97, Faculty

Traditionally, the Consumer Price Index (CPI) has served as a base of measurement of inflation in the US. But the CPI is published monthly, and at a lag. Cavallo and Rigobon’s Billion Prices Project (BPP) harvests price fluctuations of millions of items sold by more than 700 online retailers in over 70 countries, and delivers the data in real time. Because it is easier for online retailers to change prices, the BPP can capture and report macroeconomic price shocks much more quickly than the CPI.