May 2005: Disentangling the Puzzle of Inflation

Are high prices a mirage in Puerto Rico? Last year, inflation reached its highest level in PR since 1980. An adverse combination of external and internal factors is draining our pockets, and no truce appears in sight. Besides the problems posed by high prices, the PR Consumer Price Index (CPI) is quite flawed and barely can predict a trend in prices. Since 1993, inflation in PR and US are moving apart, a weird behavior that seems to defy economic laws and has left the PR economy without one of its foremost indicators. It is time to enter this fascinating and entangling world of inflation. Join us in this travel to learn how to deal with this puzzle and find a cure for this misbehaved index.