I have no background in economics and trying to understand in simpleton terms why in 2008 during the GFC according to the CPI for consumer food and energy remained relatively range bound as “all items” rose to higher rate hikes?
[RIGHT LINK BECAUSE ITS LATE AND IM TIRED](https://imgur.com/a/fh25LmT)
edit: grammar
In: 0
I’m trying to understand your question. This graph shows the rate of CPI change (inflation) for baskets of goods with or without food and energy.
You can see that the rate of change of CPI for basket of goods EXCLUDING food and energy is fairly consistent. This means that prices for those goods increased in price at a gradual pace during that period.
If we look at a basket of goods INCLUDING food and energy the rate of change of CPI increased sharply in the period at the beginning of the recession. This suggests that the cost of food and energy increased at a higher rate during that period than the cost of all other goods did.
As is often the case, what goes up must come down especially when the rate of increase is so sharp. You can see the price of a basket of goods including food and energy become negative during the end of the recession indicating that prices were reducing year on year (deflating) for food and energy.
Note that the y axis is the percentage change from the year before and doesn’t represent the absolute CPI but rather how much CPI has changed from the year prior.
I’m unsure of what you mean by the phrase “rose to higher rate hikes”
Latest Answers