I'm adding something new to the blog. Every Friday, I'll post a round-up of the week's most interesting news and research about inflation around the world. Send me story tips during the week on twitter or by email. Or add stories I've missed in the comments.
1. McDonald’s Agrees to Cut the Price of a Venezuelan Big Mac Combo (Bloomberg): McDonald's lowered the price of a Big Mac combo by 7.5% at its 139 restaurants in Venezuela. The decision was made a week after the government came to inspect company offices. In Venezuela, where inflation is the highest in the world, military-backed price regulators have forced 1000 businesses to lower prices. The Big Mac price cut is noteworthy because of the "Big Mac Index," a lighthearted but widely referenced gauge of currency misalignment.
2. Sri Lanka to Change Inflation Index to Cover Whole Nation (Daily Mirror): In May, the IMF said that Sri Lanka’s national accounts “suffer from insufficient data sources and undeveloped statistical techniques.” The current index only represents the capital city, Colombo. The new index will cover the whole nation. Sri Lanka recently cut a policy rate by 50 bpt, against the advice of the IMF.
3. Brazil Signals Inflation Will Extend World’s Biggest Rate Rise (Bloomberg): Concerns about inflation led to the sixth straight 50 bpt increase in Brazil's benchmark policy rate.
4. Make Inflation-Indexed Bonds More Attractive (New Indian Express): India is trying to issue inflation-indexed bonds, in part to wean investors away from gold and real estate. But investor response was tepid and the bonds are undersubscribed, so the government has extended the subscription deadline by 3 months.
5. Government Studies Ways to Modernize Inflation-Data Collection (WSJ): In the United States, a new BLS project is attempting to get price data directly and electronically from businesses for use in the Consumer Price Index.