Most of the recommendations in this report are terrible. Mr. Johnson should have recommended that the new quarterly OOH series based on the net aquisitions approach published on December 3 be added to the UK CPI after appropriate tweaking and this should be the target inflation indicator of the Bank of England. He should have recommended that the RPIJ replace both the RPI and the CPI for upratings purposes. Instead he recommends that the CPIH series be used for just about everything and plans to kill not just the RPI, but the RPIJ as well. Mr. Johnson actually keeps the door open for replacing most Jevons indices used in the RPI and the CPI with Dutot indices. (He should be looking at doing the opposite.) After a year or more to work on his report with some of the worlds best experts to advise him, he hasnt the slightest idea whats the best transitive formula for use in the UK consumer price indices. There is no recommendation in the report about the dysfunctional package holiday trips component although the way it quite badly lags price developments is duly noted. He says it should be a priority to look at the index. Why didnt he make it one himself? I suggested the perfect solution to the problem for the interim. All he had to do was cut-and-paste from my own work. Whats Mr. Johnson been doing all this time?
Posted on: Thu, 08 Jan 2015 23:31:07 +0000