Difference between “Core Inflation” and “Headline Inflation”.
We hear economist use the terms “Core Inflation and “Headline Inflation”. What are these?
“Headline Inflation” is most commonly represented by a price index consisting of a basket of different goods and services
“Core Inflation” is what we get after removing volatile elements such as oil and food from the basket of goods and services.
Headline inflation is generally higher then core inflation.
How does inflation affect us?
Inflation will affect you depending up0on where you are place financially
People living on fixed sources of income such as retirees will feel the pinch more, as inflation eats away the value of their income day by day.
In an inflationary scenario, a person living on borrowed money is better off as the rate of interest that he would have paid for his borrowed money would be less than the rate of inflation. Therefore inflation decreases the real value of debt.
But when you pay back your loan in an inflationary environment your lender realizes that now he can buy a little less than what he could have bought earlier with the he lent to you.
We hear economist use the terms “Core Inflation and “Headline Inflation”. What are these?
“Headline Inflation” is most commonly represented by a price index consisting of a basket of different goods and services
“Core Inflation” is what we get after removing volatile elements such as oil and food from the basket of goods and services.
Headline inflation is generally higher then core inflation.
How does inflation affect us?
Inflation will affect you depending up0on where you are place financially
People living on fixed sources of income such as retirees will feel the pinch more, as inflation eats away the value of their income day by day.
In an inflationary scenario, a person living on borrowed money is better off as the rate of interest that he would have paid for his borrowed money would be less than the rate of inflation. Therefore inflation decreases the real value of debt.
But when you pay back your loan in an inflationary environment your lender realizes that now he can buy a little less than what he could have bought earlier with the he lent to you.
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