An analysis of inflation in economy growth

The purpose of the research is presented in the first section of the report.

An analysis of inflation in economy growth

Advertisement Historical Inflation Rates The following table shows the college cost inflation rate and the general inflation rate for the years from through College cost inflation rates are based on the Digest of Education Statistics for the years and the College Board figures for four-year private colleges for the years from to the present.

Statistically, there is no correlation between college inflation rates and general inflation rates. After all, increases in college tuition rates represent a very small percentage of the CPI.

Even the rule of thumb that college costs increase at twice the inflation rate is not valid. As can be seen from the table, the college cost inflation rate has run from a high of 6. This trend may be ending because of the souring economy. Please note that the College Board annually recomputes the base year cost averages when it calculates the current year averages.

The new base year cost averages can and often do differ from the averages reported during the previous year. As such, the College Board figures are not based on an index like the general inflation rates.

The College Board reevaluated its methodology for the academic year, but did not make any fundamental changes other than improving the explanations of their methodology. Since the Consumer Price Index includes a "College tuition and fees" component, it is possible to use that component as an index of historical tuition inflation.


It reflects consumer spending on college tuition during the calendar year and is based on the same methodology as the Consumer Price Index. The second table provides these figures. Note that these figures show an average tuition inflation rate from to of 8.

The cumulative difference from to is three quarters of a percentage point per year.Applied Economics and Finance Vol. 2, No. 3; levels have led to inflation. Under current law, the deficit is projected to hold steady as a percentage of GDP through , but rise thereafter, raising the already high federal debt.

The rate of economic growth is projected to be solid in and the next few years. Monetarist theory, which came to dominate economic thinking in the s and the decades that followed, holds that rapid money supply growth is the cause of inflation.

The Slippery Slope

The theory, however, fails an actual test of the available evidence. In our review of 47 countries, generally from forward, we.

An analysis of inflation in economy growth

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Data extracted on: November 16, Source: U.S. Bureau of Labor Statistics Note: More data series, including additional geographic areas, are available through the .

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