Hidden Inflation

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.
References in periodicals archive ?
Describing the MPC as a truly revolutionary step, he said we got used to decades of moderate to high inflation, leading to industrialists and governments paying negative real interest rates and the burden of the hidden inflation tax falling on the middle class saver and the poor.
Summary: Chief Market Strategist at ADS Securities Nour Al-Hammoury points to the precarious consequences of hidden inflation from five years of QE and remarks on 'worrying similarities' to the experience of the 1970's markets
The stimulus package had created hidden inflation, which was like a pile of tinder dry wood.
We cannot see the hidden inflation bomb that may be developing.
To absorb this hidden inflation, it is necessary to allow inflation to run wild, but covertly.
Bolstered by this deteriorating productivity profile, Bergson repeatedly rejected all challenges to the reliability of Soviet data, even after the CIA became increasingly jittery about 'hidden inflation' (CIA, 1991).
This disparity highlights a fundamental flaw in Bergson's theory-normed positivist method (Rosefielde, 1981) going back to 1953, the absence of a dependable mechanism for determining when Soviet data should have been denied the benefit of the doubt, and how to have measured 'hidden inflation.' The CIA had tried to fill the void, but its approach was ad hoc.
The 'hidden inflation' issue which began dogging the profession in the 1970s was unaddressed.
Gardner describes three types of quality-related hidden inflation. Constant-quality hidden inflation is a hidden price increase that occurs when producers evade price controls by introducing "new" products with insignificant quality improvements, at higher prices.
Some methods to correct for hidden inflation that are assessed by Gardner include the matched model method, direct quality adjustment, and hedonic analysis.
(18) The reader is referred to the conference proceedings for a discussion of whether this phenomenon is a form of hidden inflation.
While the official Soviet data do show a rise in growth rates in that plan period, there is considerable dispute among economists as to the reliability of the official data because they do not take into account a hidden inflation factor.