How the CPI hid the housing bubble

Recent discussions about the CPI have brushed over a key change that occurred in the construction of the index in 1998. In its 13th Series the CPI became a pure price index utilising an acquisitions approach, rather than a cost-of-living index utilising an outlays approach.  One feature of this change is that it removed land costs for owner-occupiers – something which doesn’t appear to reflect reality and provides some intriguing results.
...
Read the full article at MacroBusiness