Developing a municipal price index.
Government Finance Review › Vol. 26 Nbr. 2, April 2010
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Developing a municipal price index.
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Governments are under considerable pressure to relate their spending and taxation levels to cost inflation, yet each local government's experience with inflation can differ greatly from a national average. The City of Calgary, Alberta, has responded by developing a municipal price index (MPI) to improve the accuracy by which its local government costs can be projected. Calgary's work has emphasized the need for governments to revisit their selected inflation measures for accuracy and to communicate broadly about how inflation measures correspond to local government needs. The most widely applied measure of inflation is the Consumer Price Index (CPI). Given its pervasive use in setting cost-of-living adjustments, it can be the appropriate metric when calculating the rate of consumer inflation at the national level. Major components within the CPI include housing, food, and transportation. It is often used in inflation calculations such as Social...See the full content of this document
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