Interesting.A second inflation measure comes from Web behemoth Google and is a pet project of the company's chief economist, Hal Varian. As reported by the Financial Times, earlier this year, Varian decided to use Google's vast database of Web prices to construct the "Google Price Index," a constantly updated measure of price changes and inflation. (The idea came to him when he was searching for a pepper grinder online.) Google has not yet decided whether it will publish the price index, and has not released its methodology. But Varian said that his preliminary index tracked CPI closely, though it did show periods of deflation—the worrisome incidence of prices actually falling—where the CPI did not.
Do We Need Google To Measure Inflation?
Economists are creating new methods for tracking prices.
By Annie Lowrey
Posted Monday, Dec. 20, 2010, at 5:10 PM ET