The Boskin Commission and the Consumer Price Index

This our weekly discussion of the price level as it relates to Perry Mehrling's money view. The price level is the average price of goods in terms of money or, equivalently, the price of money in terms of goods. But what determines the price level? Why is the price level important? And how does it fit into the money view?

When we measure the price level, what is it, exactly that we're trying to measure? What outcomes will an accurate measurement help us achieve? Is our goal to be able to better implement policies that automatically adjust to changes in the price level? Is it to stabilize the price level better? Both? Is it more useful for a price index to be accurate over the short run or the long run?

What can these questions help us understand about the nature of money?

In mid-90s, the Boskin commission set out to study how well the consumer price index (CPI) reflected changes in the cost of living. We're reading a "The Boskin Commission Report: A Retrospective One Decade Later" by Robert J. Gordon.

https://www.researchgate.net/publication/24051588_The_Boskin_Commission_Report_A_Retrospective_One_Decade_Later