INFLATION is widely believed to be the most important economic problem facing the United States and most other countries in the world. Thus it is not surprising that the monthly publication of the U.S. Consumer Price Index (CPI) is so closely watched both inside and outside of government. Large increases in the CPI are bad news for Administration officials, particularly in election years, and may lead to sudden policy reversals such as the introduction of the Carter Administration’s ill-fated credit controls in March 1980. Large increases in the CPI, however, are good news for millions of recipients of social security benefits, government retirement pay, and other payments that by law or contract must be escalated in step with the CPI. Also, since foreigners watch the CPI closely for clues to the future course of U.S. interest rates and the exchange value of the dollar, the CPI is probably the single most quoted economic statistic in the world.