What is the Mexican Central Bank aiming at?

Abstract

The Consumer Price Index (CPI) is a Laspeyres index with a plutocratic method. This paper has three purposes. The first one is to assemble a democratic CPI. The second purpose is to construct an alternative index using the median of the expenditure distribution. The third one is to compile price indexes for each one of the ten expenditure deciles. The concern about the use of a single price measurement has policy implications. Also, the empirical results are analyzed in terms of the political economy of price measurement and in terms of the history of the monetary policy.

JEL Classification: C43, E31, E52.