Price index

A statistical measure that tracks price changes for a selected basket or group of goods and services relative to a reference period.

Market basket: A defined collection of goods and services used to represent consumption or production. The basket specifies which prices the index tracks.
Consumer price index: A price index measuring changes in prices paid by households for a defined set of goods and services. It tracks consumer-facing price changes using a household-oriented basket.
Cost-of-living index: An index measuring the expenditure needed to maintain a specified standard of living as prices change. It accounts for substitution toward cheaper goods, unlike many fixed-basket indexes.
Indexation: The adjustment of payments, contracts, or financial values in line with a specified index. Indexation makes measured price changes feed directly into economic payments.
Index number: A statistical measure expressing a quantity relative to a chosen reference value. A price index is an index number built from price observations.
Producer price index: A price index measuring changes in prices received by domestic producers for their output. It captures price movements earlier in the production and distribution chain.
Inflation: A sustained increase in the general level of prices across an economy. Inflation is the phenomenon; a price index is one way to measure it.
Bracket creep: A rise in tax burden caused when nominal incomes increase and tax thresholds remain fixed. Inflation measures inform policies that adjust tax brackets to limit this effect.
Base period: The reference period against which measurements in an index are compared. Setting the base period determines the index’s reference level.
GDP deflator: A price index for goods and services included in a country’s gross domestic product. It measures price changes across domestically produced final output.

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