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Yes, because CPI is a product of both market forces and changes in money supply. The former is not controlled much by anyone, while the latter is controlled by some very rough and not easily predictable knobs held by guys at Fed. Guys at Fed are committed to keep CPI at something like constant 2%, so the must turn these knobs, but for that they need a good feedback as to what their movements are doing.

And sure, they could use something different as a measure of inflation than CPI, but what would that be, and why it would be better than CPI? These questions need to be answered first before we move away from CPI.




The Fed's dual mandate is very important here. And there's some movement toward "automatic QE in case unemployment starts to rise" - https://www.stitcher.com/show/voxs-the-weeds/episode/fix-rec... (Matt Yglesias wonktalks with Claudia Sahm, very recommended)

CPI is very important, but the labor numbers are much better (since they are easier to measure), so CPI might become a secondary (high level, target) metric over time.




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