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The above pic shows inflation at 5 years intervals. I am finding a bit hard to understand this table. For e.g. calculation of percentage rise in wholesale prices in 1960 seems to be wrong. Actual rise (100.7 - 97.2)/97.2 = 3.6% but the table says its 9.2%. I found such discrepancies in other values as well. Also, I am not able to grasp the footnotes at the table (specifically point a and b). Can someone please explain? Thanks!


1 Answer 1


Footnote a means the following:

  1. Price levels are annual averages
  2. The table sets the year 1957 as the base level (100) for both wholesale and consumer prices
  3. Indexing the year 1967 as the base level--instead of 1957--would lower 1970 consumer prices from 134.0 (as displayed in the table) to 116.3 and 1970 wholesale prices from 117.5 to 110.4
  4. "for the stock index" is a misprint and belongs in footnote b immediately below

Footnote b means that the S&P stock index was normalized to a value of 10 during the interval from 1941-1943. That choice was probably influenced by World War 2, just as the year 1946 was used instead of 1945 (to avoid the distortion effect of temporary war time price controls).

There are a lot of errors in the five-year percentage changes throughout the table, for wholesale and consumer prices as well as stock index earnings and prices.

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