2

MONITORING JOBS
AND INFLATION
After studying this chapter, you will be able to:
¨ Explain why unemployment is a problem and how
we measure the unemployment rate and other
labor market indicators
¨ Explain why unemployment occurs and why it is
present even at full employment
¨ Explain why inflation is a problem and how we
measure the inflation rate

Copyright © 2023 Pearson Education, Ltd.

 Employment and Unemployment

What kind of job market will you enter when you graduate?
The class of 2021 faced a challenging job market, but a
better market than those of the decade that preceded it.
In May 2021, 9 million Americans wanted a job but
couldn’t find one. That number is down from 15 million at
the end of 2009 and 23 million in 2020.
The U.S. economy creates lots of jobs: In 2009, even with
15 million unemployed, 139 million people had jobs—22
million more than in 1989.
And in 2019 before Covid, job growth had created another
20 million jobs, taking the total to 159 million.
Copyright © 2023 Pearson Education, Ltd.
 Employment and Unemployment

Why Unemployment Is a Problem

Unemployment results in
Lost incomes and production
Lost human capital
The loss of income is devastating for those who bear it.
Employment benefits create a safety net but don’t fully
replace lost wages, and not everyone receives benefits ( 房
貸、車貸、電器貸款、 credit card 、學貸 etc. ).
Prolonged unemployment permanently damages a
person’s job prospects by destroying human capital.

Copyright © 2023 Pearson Education, Ltd.

 Employment and Unemployment

Current Population Survey

The U.S. Census Bureau conducts a monthly population
survey to determine the status of the U.S. labor force.
The population is divided into two groups:
1. The working-age population—the number of people
aged 16 years and older who are not in jail, hospital, or
some other institution
2. People too young to work (under 16 years of age) or in
institutional care

Copyright © 2023 Pearson Education, Ltd.

 Employment and Unemployment

The working-age population is divided into two groups:

1. People in the labor force
2. People not in the labor force ( 遊學 ? 準備考試 ? 思考未來 ? 55
歲退休 ? not in the labor force)
The labor force is the sum of employed and unemployed
workers.

Copyright © 2023 Pearson Education, Ltd.

 Employment and Unemployment

To be counted as unemployed, a person must be in one of

the following three categories:

1. Without work but has made specific efforts to find a job

within the previous four weeks

2. Waiting to be called back to a job from which he or she

has been laid off (e.g. 新光氣爆、 COVID-19, 2009
financial crisis)

3. Waiting to start a new job within 30 days

Copyright © 2023 Pearson Education, Ltd.

 Employment and Unemployment

Figure 22.1 shows the

labor force categories.

In May 2021:
Population: 331 million
Working-age population:
261 million
Labor force: 161 million
Employed: 152 million
Unemployed: 9 million

Copyright © 2023 Pearson Education, Ltd.

Copyright © 2023 Pearson Education, Ltd.
主計處 ( 歲計、會計、統計 )

• ( 一 ) 民間勞動力：指在資料標準週內年滿 15 歲可以工作之民間人口，包括就業者及失業
者。
• ( 二 ) 就業者：指在資料標準週內年滿 15 歲從事有酬工作者，或從事十五小時以上之無酬家
屬工作者。
• ( 三 ) 失業者：指在資料標準週內年滿 15 歲同時具有下列條件者 :
• (1) 無工作； (2) 隨時可以工作； (3) 正在尋找工作或已找工作在等待結果。此外，尚包括
等待恢復工作者及找到職業而未開始工作亦無報酬者。

Copyright © 2023 Pearson Education, Ltd.

主計處
• ( 四 ) 非勞動力：指在資料標準週內，年滿 15 歲不屬於勞動力之民間人口，包括因就學、料
理家務、高齡、身心障礙、想工作而未找工作及其他原因等而未工作亦未找工作者。
• ( 五 ) 勞動力參與率：勞動力占 15 歲以上民間人口之比率。
• ( 六 ) 失業率：失業者占勞動力之比率。
• ps: 含 15 日之一週為資料標準週；於資料標準週次週查填標準週內發生之事件。
• 至於外籍人士、外勞以及尚未取得中華民國國籍的外籍配偶等，都不是本調查的對象

Copyright © 2023 Pearson Education, Ltd.

• 前述失業人口定義中第 (3) 項條件「正在尋找工作」，常被廣義解釋為「有工作意願」即可，甚且被完
全忽略，導致「失業」認定標準不一，此或為外界質疑我國失業水準偏低之關鍵。
• 由於「想工作而未找工作且隨時可以開始工作者」並無找工作之實際行動，依前揭失業定義應視為非勞
動力而不屬失業者，惟為完整呈現勞動力運用狀況，主計處亦按月將「想工作而未找工作且隨時可以開
始工作者」併入失業人口計算「廣義失業率」

Copyright © 2023 Pearson Education, Ltd.

 Employment and Unemployment

Three Labor Market Indicators

The unemployment rate
The employment-to-population ratio
The labor force participation rate ( 勞動參與率 )

Copyright © 2023 Pearson Education, Ltd.

 Employment and Unemployment

The Unemployment Rate

The unemployment rate is the percentage of the labor
force that is unemployed.
The unemployment rate is
(Number of people unemployed ÷ labor force)  100.
In May 2021, the labor force was 160.9 million and
9.3 million were unemployed, so the unemployment rate
was 5.8 percent.
The unemployment rate increases in a recession and
reaches its peak value after the recession ends. ( 以美國為例 ,
GDP Q4 轉為正成長 +5.9%, 就業市場仍然疲弱 9.7%, 2010 January)
Copyright © 2023 Pearson Education, Ltd.
 Employment and Unemployment

Figure 22.2 shows the unemployment rate: 1980–2021.

The unemployment rate increases in a recession.

Copyright © 2023 Pearson Education, Ltd.

 Employment and Unemployment

The Employment-to-Population Ratio

The employment-to-population ratio is the percentage
of the working-age population who have jobs.
The employment-to-population ratio is
(Employment ÷ Working-age population)  100.
In May 2021, the employment was 151.6 million and the
working-age population ( 非總人口 !) was 261.3 million.
The employment-to-population ratio was 58 percent.
tw: 113 年 10 月就業人數為 1,160.9 萬人，失業人數為 40.8 萬人，失業率為
3.40% (1161/2340= %)

Copyright © 2023 Pearson Education, Ltd.

 Employment and Unemployment

The Labor Force Participation Rate

The labor force participation rate is the percentage of
the working-age population who are members of the
labor force.
The labor force participation rate is
(Labor force ÷ Working-age population)  100.
In May 2021, the labor force was 160.9 million and the
working-age population was 261.3 million.
The labor force participation rate was 61.6 percent.

Copyright © 2023 Pearson Education, Ltd.

 Employment and Unemployment

Figure 22.3 shows that the labor force participation rate

and the employment-to-population ratio both trended
upward before 2000 and downward after 2000.

Copyright © 2023 Pearson Education, Ltd.

 Employment and Unemployment

Other Definitions of Unemployment

The purpose of the unemployment rate is to measure the
underutilization of labor resources.
The BLS believes that the unemployment rate gives a
correct measure.
But the official measure is an imperfect measure because
it excludes
Marginally attached workers
Part-time workers who want full-time jobs

Copyright © 2023 Pearson Education, Ltd.

 Employment and Unemployment

Marginally Attached Workers

A marginally attached worker ( 準待業人員 ) is a person who
currently is neither working nor looking for work but has
indicated that he or she wants and is available for a job
and has looked for work sometime in the recent past.
A discouraged worker ( 失意的工人、怯志工作者、喪志勞工 ) is a
marginally attached worker who has stopped looking for a
job because of repeated failure to find one.

Copyright © 2023 Pearson Education, Ltd.

 吳敦義：年底失業率未低於 5% 我負責
發稿時間： 2010/03/03 12:55

（中央社記者李明宗高雄縣 3 日電）行政院長吳敦義今天表示，今年是促進就業年與節能減碳
年，若年底失業率不能降到 5% 以下，不能怪東怪西，「沒做到就我負責，負責包括辭職」。

Copyright © 2023 Pearson Education, Ltd.

 Employment and Unemployment

Part-Time Workers Who Want Full-Time Jobs

Many part-time workers want to work part time, but some
part-time workers would like full-time jobs and can’t find
them.
In the official statistics, these workers are called economic
part-time workers and they are partly unemployed.
Most Costly Unemployment
All unemployment is costly, but the most costly is long-
term unemployment that results from job loss.

Copyright © 2023 Pearson Education, Ltd.

 Employment and Unemployment

Alternative Measures of Unemployment

The BLS reports six alternative measures of the

unemployment rate: two narrower than the official measure
and three broader ones.
The narrower measures, U-1 and U-2, focus on the
personal cost of unemployment.
The broader measures, U-4, U-5, and U-6, focus on
assessing the full amount of unused labor resources.

Copyright © 2023 Pearson Education, Ltd.

 Employment and Unemployment

Figure 22.4 shows six

alternative measures.
U-1: Those unemployed
for 15 weeks or
longer
U-2: Unemployed job
losers
U-3: The official
unemployment rate

Copyright © 2023 Pearson Education, Ltd.

 Employment and Unemployment

Broader measures are

U-4: U-3 plus Discouraged
workers
U-5: U-4 plus Other
marginally attached
workers
U-6: U-4 plus Part-time
workers who want
full-time jobs
All measures increase
together in recession.
Copyright © 2023 Pearson Education, Ltd.
 Unemployment and Full Employment

Unemployment can be classified into three types:

Frictional unemployment ( 摩擦性 )
Structural unemployment
Cyclical unemployment

Copyright © 2023 Pearson Education, Ltd.

 Unemployment and Full Employment

Frictional Unemployment
Frictional unemployment is unemployment that arises
from normal labor market turnover. ( 短期的失業現象 )
The creation and destruction of jobs requires that
unemployed workers search for new jobs.
(1)Increases in the number of people entering and
reentering the labor force and (2) increases in
unemployment compensation raise frictional
unemployment.
Frictional unemployment is a permanent and healthy
phenomenon of a growing economy.
Copyright © 2023 Pearson Education, Ltd.
 失業給付

1. 前 6 個月平均月投保薪資
2. 失業給付每月按申請人平均月投保薪資 60% 發給，最長發給 6 個月
3. 被保險人於請領失業給付期間有受其扶養之眷屬，每一人按申請人離職辦理就業保險退保之
當月起前 6 個月平均月投保薪資 10% 加給給付，最多計至 20% (=> 一妻一兒 )

Copyright © 2023 Pearson Education, Ltd.

 Unemployment and Full Employment

Structural Unemployment
Structural unemployment is unemployment created by
changes in technology and foreign competition that
change the skills needed to perform jobs or the locations
of jobs. ( 市場競爭的結果或者是生產技術改變而造成的失業， e.g.: 1990 年中華民國
開放臺商對中國大陸投資 )
Structural unemployment lasts longer than frictional
unemployment.

Copyright © 2023 Pearson Education, Ltd.

 Unemployment and Full Employment

Cyclical Unemployment 循環性失業

Cyclical unemployment is the higher than normal
unemployment at a business cycle trough ( 谷底 ) and
lower than normal unemployment at a business cycle
peak.
A worker who is laid off because the economy is in a
recession and is then rehired when the expansion begins
experiences cyclical unemployment. (us: 冬季滑雪業、 tw: 夏季薑
母鴨 )

Copyright © 2023 Pearson Education, Ltd.

 Unemployment and Full Employment

“Natural” Unemployment

Natural unemployment is the unemployment that arises

from frictions and structural change when there is no
cyclical unemployment.

Natural unemployment is all frictional and structural

unemployment.

The natural unemployment rate ( 自然失業率 ) is natural

unemployment as a percentage of the labor force.

Copyright © 2023 Pearson Education, Ltd.

 Unemployment and Full Employment

Full employment ( 充分就業 ) is defined as the situation in

which the unemployment rate equals the natural
unemployment rate. ( 經濟中的總需求減少，導致勞動人口過剩，從而出現失業情
況。這種失業被歸類為非自願性失業 ).
When the economy is at full employment ( 充分就業 ), there
is no cyclical unemployment or, equivalently, all
unemployment is frictional and structural (natural
unemployment rate).

Copyright © 2023 Pearson Education, Ltd.

 Unemployment and Full Employment

The natural unemployment rate changes over time and

is influenced by many factors.
Key factors are

1. The age distribution of the population (ex: young

population, guess the population of id?)

2. The scale of structural change

3. The real wage rate (minimum wage & efficiency
wage)

4. Unemployment benefits ($)

Copyright © 2023 Pearson Education, Ltd.

Copyright © 2023 Pearson Education, Ltd.
 Unemployment and Full Employment

Real GDP and Unemployment Over the Cycle

Potential GDP is the quantity of real GDP produced at full
employment. ( 沒有景氣循環的影響下之產出 ; 潛在的 GDP)
Potential GDP corresponds to the capacity of the
economy to produce output on a sustained basis.
Real GDP minus potential GDP is the output gap.
Over the business cycle, the output gap fluctuates and
the unemployment rate fluctuates around the natural
unemployment rate.

Copyright © 2023 Pearson Education, Ltd.

 Unemployment and Full Employment

Figure 22.5 shows the output gap

( 為正 ? Potential 90 分 , 考 92 分 ?)
and …
the fluctuations of unemployment
around the natural rate.
When the output gap is
negative, ... the unemployment
rate (3.2%) exceeds the natural
unemployment rate (2.6%).

Copyright © 2023 Pearson Education, Ltd.

 Price Level, Inflation, and Deflation

The price level is the average level of prices and the

value of money.
A “persistently” rising price level is called inflation ( 通
貨膨脹 ).
A persistently falling price level is called deflation ( 通貨緊
縮 ).
We are interested in the price level because we want to
1. Measure the inflation rate or the deflation rate
2. Distinguish between money (nominal) values
and real values of economic variables.

Copyright © 2023 Pearson Education, Ltd.

 Price Level, Inflation, and Deflation

Why Inflation and Deflation Are Problems

Low, steady, and anticipated inflation or deflation (???) is
not a problem.
Unpredictable inflation or deflation is a problem because it
Redistributes income ( 所得重分配 )
Redistributes wealth
Lowers real GDP and employment
Diverts resources from production ( 資源配置錯誤 )

Copyright © 2023 Pearson Education, Ltd.

 Price Level, Inflation, and Deflation

Unpredictable changes in the inflation rate redistribute

income in arbitrary ( 任意的 ) ways (between employers and
workers) and (between borrowers and lenders) Q.
A high inflation rate is a problem because it diverts
resources from productive activities to inflation forecasting.
From a social perspective, this waste of resources is a
cost of inflation.
At its worst, inflation becomes hyperinflation ( 惡性通膨 )—an
inflation rate that is so rapid that workers are paid twice a
day because money loses its value so quickly.

Copyright © 2023 Pearson Education, Ltd.

 Examples around the world

中國大陸 : 中國通貨膨脹 (1938 年 -1950 年 )

在 1946 年 -1949 年間達到高潮。政府因開戰而支出大為增加，但戰後的中國通漲仍在繼續。 1947
年國府甚至曾凍結工資，亦無果而終。當時的輿論稱：在百業蕭條的中國，唯一仍在全力開動的工業是鈔票印刷業。
1947 年發行的鈔票最高面額為 5 萬元，到了 1948 年中已到了 1 億 8 千萬。法幣的發行量自抗戰結束
時的 5569 億元增長到 1946 年發行的 8.2 萬億多元，而後到 1948 年時已激增至 660 萬億元。
當時甚至有造紙廠以低面額法幣作為生產原料而獲利。 1948 年國民政府實施貨幣政策改革，用新發行的金圓券
取代原有流通的法幣，結果不到一年的時間，金圓券的發行面額就增至 1 千萬，甚至在地區性的新疆省銀行曾在
1949 年發行了面額為 60 億圓的紙幣。

Copyright © 2023 Pearson Education, Ltd.

 Examples

台灣
1945 年二次大戰結束，日本無條件投降後退出台灣，原有由日本臺灣總督府在台灣發行使用的「台灣銀行券」在
1946 年改為「台幣」，然而國共內戰，國民黨政府以輸出貨幣取得台灣民間米、鹽、糖、礦物等資源，使台幣在
1947 年造成通貨膨脹，進而使台幣的發行面額增加，最高曾發行「一百萬元」面額的鈔票。這也是造成二二八事
件的重要因素。在 1948 年，因為上海金融危機，終於釀成臺幣幣值大幅貶值的惡性通貨膨脹，惡性通貨膨脹造成
1949 年發行「新台幣」來取代原有的「台幣」（原先的「台幣」改稱「舊台幣」），兌換比率為 40,000
比 1 ，即 40,000 元舊台幣兌換 1 元新台幣。此通貨膨脹因為美援及美國介入台灣內政（改善資源分配）而
結束。
誰獲利 ?

Copyright © 2023 Pearson Education, Ltd.

 Examples
1980 年辛巴威獨立時一辛巴威元約等於 1.5 美元。之後，通膨率高企和經濟崩潰令貨幣嚴重貶值，使很多機構轉用美元。
21 世紀初辛巴威開始經歷惡性通膨，通膨率升至 2004 年初的 624% ，其後降至三位數字低位，之後攀升至 2006 年四
月 1,042.9% 的新高。
2006 年的 2 月 16 日，辛巴威儲備銀行行長 Dr Gideon Gono 宣佈政府印了 21 兆辛巴威元來換取外幣，以支付國
際貨幣基金組織的欠款。
2006 年五月初，辛巴威政府印製一共 60 兆辛巴威元的貨幣，用來資付兵警 300% 和其他公務員 200% 的薪金加幅。這
筆錢不包括在本年財政年度的預算案中，而政府沒有解釋這筆錢的來源。
2007 年 6 月，在辛巴威的通貨膨脹率已從早先估計的 9000 ％上升到 11000 ％。
2008 年 5 月 5 日，辛巴威儲備銀行發行的鈔票的價值 1 億元和 2.5 億元， 10 天後，新的無記名支票，價值 5 億元（當
時約等於 2.5 美元）印發。 5 天後，一個新系列的筆記形式的「農支票」的發行面值 50 億元， 250 億元， 500 億元和
1000 億元（ 7 月 21 日）。辛巴威 5 月份的通貨膨脹率已上升到 2,200,000 ％。官方數字公佈的 6 月份的通貨膨脹率
估計超過 11,200,000% 。至 2008 年 12 月，辛巴威政府發行 100 兆面額的新鈔，但實質上僅值 25 美
元， news update

Copyright © 2023 Pearson Education, Ltd.

Copyright © 2023 Pearson Education, Ltd.
Copyright © 2023 Pearson Education, Ltd.
 Price Level, Inflation, and Deflation

The Consumer Price Index

The Consumer Price Index, or CPI, measures the average
of the prices paid by urban ( 都市、都會區 ) consumers for a
“fixed” basket of consumer goods and services.

Copyright © 2023 Pearson Education, Ltd.

各位同學好：
• 系上假於 3/6( 四 ) 中午 12:15-13:00 於管院 105 教室舉辦系與西密西根大
學 (WMU) 經濟所 3+2 學碩士雙聯合作說明會，邀請黃維喬老師 ( 現為西密西根大學
經濟系教授 ) 說明。
• 學士班同學於本校就讀大一 ~ 大三，大四起於西密西根大學經濟所修課二年，所修課程可視
為學士班自由選修課程，取得西密西根大學碩士學位。
歡迎有興趣的同學踴躍參與。
• WMU?

Copyright © 2023 Pearson Education, Ltd.

 Price Level, Inflation, and Deflation

Reading the CPI ( 消費者物價指數 ) Numbers

The CPI is defined to equal 100 for the reference base
period. (105 改為 110 年 =100)
Currently, the reference base period is 19821984.
That is, for the average of the 36 months from January
1982 through December 1984, the CPI equals 100.
In May 2021, the CPI was 269.2.
This number tells us that the average of the prices paid by
urban consumers for a fixed basket of goods was 169.2
percent higher in May 2021 than it was during 19821984.

Copyright © 2023 Pearson Education, Ltd.

新 (110 年 ) 、舊基期查價項目及權數對照表 ( 含 1111216 新聞
稿)

Copyright © 2023 Pearson Education, Ltd.

 Price Level, Inflation, and Deflation

Constructing the CPI

Constructing the CPI involves three stages:
Selecting the CPI basket
Conducting a monthly price survey
Calculating the CPI

Copyright © 2023 Pearson Education, Ltd.

 Price Level, Inflation, and Deflation

The CPI Basket

The CPI basket is based on a Consumer Expenditure
Survey, which is undertaken infrequently.
The CPI basket today is based on data collected in the
Consumer Expenditure Survey of 2019.

Copyright © 2023 Pearson Education, Ltd.

 Price Level, Inflation, and Deflation

Figure 22.6 illustrates the

CPI basket.
Housing is the largest
component. ( 指的是租金 not
房貸 ) ，房價不列入 CPI
Transportation and food
and beverages are the next
largest components.
All other components
account for 27 percent of
the basket.

Copyright © 2023 Pearson Education, Ltd.

 Price Level, Inflation, and Deflation

The Monthly Price Survey

Every month, BLS employees check the prices of the
80,000 goods in the CPI basket in 30 metropolitan (?)
areas.
Calculating the CPI
1. Find the cost of the CPI basket at base-period prices.
2. Find the cost of the CPI basket at current-period prices.
3. Calculate the CPI for the current period.

Copyright © 2023 Pearson Education, Ltd.

 Price Level, Inflation, and Deflation

Let’s work an example of

the CPI calculation.
In a simple economy,
people consume only
oranges and haircuts.
The CPI basket is
10 oranges and 5 haircuts.
The table also shows the
prices in the base period.
The cost of the CPI basket
in the base period was $50.
Copyright © 2023 Pearson Education, Ltd.
 Price Level, Inflation, and Deflation

Table 22.1(b) shows the

fixed CPI basket of goods.
It also shows the prices in
the current period.
The cost of the CPI basket
at current-period prices is
$70.

Copyright © 2023 Pearson Education, Ltd.

 Price Level, Inflation, and Deflation

The CPI is calculated using the formula:

CPI = (Cost of basket at current-period prices ÷ Cost of
basket at base-period prices) x 100.
Using the numbers for the simple example,
CPI = ($70 ÷ $50) x 100 = 140.
The CPI is 40 percent higher in the current period than it
was in the base period.

Copyright © 2023 Pearson Education, Ltd.

 Price Level, Inflation, and Deflation

Measuring the Inflation Rate

The major purpose of the CPI is to measure inflation.
The inflation rate is the percentage change in the price
level from one year to the next.
The inflation formula is::[(new-old)/old]
Inflation rate = [(CPI this year – CPI last year) ÷ CPI last
year]  100.

Copyright © 2023 Pearson Education, Ltd.

 Price Level, Inflation, and Deflation

Figure 22.7 shows the

relationship between the
price level and the inflation
rate.
The inflation rate is
 High when the price level
is rising rapidly.
 Low when the price level
is rising slowly.
 Negative when the price
level is falling.
Copyright © 2023 Pearson Education, Ltd.
 Price Level, Inflation, and Deflation

The Biased CPI

The CPI might overstate ( 高估 ) the true inflation rate for
four reasons:
1.New goods bias
2.Quality change bias
3.Commodity substitution bias
4.Outlet substitution bias

Copyright © 2023 Pearson Education, Ltd.

 Price Level, Inflation, and Deflation

New Goods Bias

New goods that were not available in the base year
appear and, if they are more expensive than the goods
they replace, they put an upward bias into the CPI. (ex:
iPod vs walkman)
Quality Change Bias
Quality improvements occur every year. Part of the rise in
the price is payment for improved quality and is not
inflation. (ex: mobile phone, laptop)
The CPI counts all the price rise as inflation.

Copyright © 2023 Pearson Education, Ltd.

 Price Level, Inflation, and Deflation

Commodity Substitution Bias

The market basket of goods used in calculating the CPI is
fixed and does not take into account consumers’
substitutions away from goods whose relative prices
increase. (2010 March, 芭樂 $2/600g? 2006-08, 蛋柳丁 1 顆 1
元便宜促銷、椪柑、柳丁現在只要一元就可以買到 )
Outlet Substitution Bias
As the structure of retailing changes, people switch to
buying from cheaper sources (ex: 網路拍賣、團購、蝦皮 ), but the
CPI, as measured, does not take account of this outlet
substitution.

Copyright © 2023 Pearson Education, Ltd.

 芭樂 1 斤 2 元 40 公噸倒土堆製有機肥
記者 黃志偉 彰化 報導 發佈時間： 2010/03/05 17:56

• 農曆年過後天氣轉熱，彰化芭樂量產價格卻慘跌，一台斤只剩 2 元，農民叫苦連天，農糧署
以 1 公斤 4 元收購堆肥，做成有機肥料，也等於農民大半年的辛勞，全都要埋進土裡，也有
地方人士發起「捐一張發票，送一斤芭樂」活動，救農民。
• 新鮮翠綠的芭樂將近 40 公噸，沒有運到市場賣，而是全倒在土堆裡，再由挖土機一鏟一鏟
攪拌均勻，準備做成有機肥，用堆肥取代買賣，農民也很無奈，他們說過年前，芭樂 1 公斤
7 元，已經低於成本，沒想到過年後，價格嚴重崩盤，只剩 2 元，是 10 年來最低的價
格。

Copyright © 2023 Pearson Education, Ltd.

Copyright © 2023 Pearson Education, Ltd.
 Price Level, Inflation, and Deflation

The Magnitude of the Bias

An estimate made in 1996 says that the CPI overstates
inflation by 1.1 percentage points a year.
Some Consequences of the Bias
Distorts ( 扭曲 ) private contracts. (ex: wage contract, public
infrastructure contract)
 Increases government outlays (close to a third of federal
government outlays, 支出 , are linked to the CPI).
The BLS has now corrected much of the bias, but some
still remains.

Copyright © 2023 Pearson Education, Ltd.

 Price Level, Inflation, and Deflation

Alternative Price Indexes

Alternative measures of the price level are
Chained CPI ( 少用 )
Personal consumption expenditure price index ， ( 少用 )
=> PCE deflator = (nominal C ÷ real C) x 100
GDP deflator (GDP 平減指數又稱作「隱性物價指數」 )
躉售物價指數 (WPI, wholesale price index)
PPI (Producer Price Index, PPI ）

Copyright © 2023 Pearson Education, Ltd.

 Price Level, Inflation, and Deflation

Chained CPI
The chained CPI is a price index that is calculated using a
similar method to that used to calculate chained-dollar real
GDP described in Chapter 21.

Copyright © 2023 Pearson Education, Ltd.

 Price Level, Inflation, and Deflation

Personal Consumption Expenditure Price Index (PCEPI)

PCEPI equals
(Nominal consumption expenditure ÷ Real consumption
expenditure) x 100
PCEPI is broader than that in the CPI because it includes
all consumption expenditure, not only the items bought by a
typical urban family.
GDP Deflator
GDP deflator is like the PCE deflator except it includes the
prices of all goods and services that are counted in GDP.

Copyright © 2023 Pearson Education, Ltd.

 Price Level, Inflation, and Deflation

Core Inflation
The core inflation rate attempts to reveal the underlying
inflation trend.
The core inflation rate is calculated as the percentage
change in the core PCEPI, which is PCEPI excluding the
prices of food and fuel, the two most volatile prices.
But if the relative prices of the excluded items are changing,
the percentage change in the core PCEPI will give a biased
measure of the inflation rate.

Copyright © 2023 Pearson Education, Ltd.

 Price Level, Inflation, and Deflation

Figure 22.8 graphs the

CPI inflation rate and the
core inflation rate.
The core inflation rate
removes the extreme
swings in CPI inflation.
The core inflation is also
biased downward.

Copyright © 2023 Pearson Education, Ltd.