The consumer price index as a measure of consumer price inflation

Abstract

This study examines the relationship between the Consumer Price Index and consumer price inflation within Malaysia. The purpose is to establish whether or not the Consumer Price Index can be used as an accurate measure of consumer price inflation, the paper contrasts and compares historical data in order to establish a relationship between the two variables. Hence, a correlational methodology and approach has been adopted as is it imperative for an accurate comparison to be drawn. The historical data used and compared ranges from 2014 – 2017 however, a brief history was also required in order to gain an accurate understanding of the Consumer Price Index and inflation within the country, along with the factors that influence it; therefore, data from as far as 1973 was utilized within the literature review. Through this comparative study we can also gain an understanding of the type of impact (in terms of figures) that consumer price inflation has on the Consumer Price Index as either a percentage increase or decrease.