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The Consumer Price Index and National Saving


Although a majority of U.S. lawmakers now favor the goal of balancing the federal budget within the next decade, there is little consensus on how to achieve it. One current proposal is that the Consumer Price Index (CPI) should be adjusted to better reflect the cost-ofliving increases that result from inflation. If adopted, this measure will not only improve the long-run deficit outlook but, more importantly, will boost the nation's flagging saving rate.

Although a majority of U.S. lawmakers now favor the goal of balancing the federal budget within the next decade, there is little consensus on how to achieve it. One current proposal is that the Consumer Price Index (CPI) should be adjusted to better reflect the cost-ofliving increases that result from inflation. If adopted, this measure will not only improve the long-run deficit outlook but, more importantly, will boost the nation's flagging saving rate.


Suggested citation: Bryan, Michael F., and Jagadeesh Gokhale, 1995. "The Consumer Price Index and National Saving," Federal Reserve Bank of Cleveland, Economic Commentary, 10.15.1995.

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