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Hidden Inflation

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Hidden Inflation
A reduction in the purchasing power of money that one does not immediately notice because a company maintains the same prices for retail products, but begins to make those products with lower quality materials.


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To absorb this hidden inflation, it is necessary to allow inflation to run wild, but covertly.
But the hidden inflation, which is merely offsetting the increase in savings, has a great shot at making the GDP up-tick in the second or third quarter.
The Agency simply replaced value series it suspected were contaminated by hidden inflation with proxy physical series, a procedure that could have been wide of the mark in both directions.
 
 
 
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