What is the Harmonized Index of Consumer Prices?

The Harmonized Index of Consumer Prices (HICP) is an index used by the European Central Bank to measure inflation by measuring the prices of common household commodities across the European Union.

Who Created the Harmonized Index of Consumer Prices?

The Harmonized Index of Consumer Prices is a list created through the participation of all member nations of the European Union (also called the Eurozone).

How is the Harmonized Index of Consumer Prices (HICP) Used?

The HICP is a tool used to measure inflation and articulate fiscal policy. Any change in prices across the member nations is detected by their individual HICP. 

How Does the Harmonized Index of Consumer Prices (HICP) Differ from the US COP?

The HICP differs from the United States Consumer Price Index (US CPI) in that the former tracks the prices of essential goods based on sample data collected from both rural and urban consumers, while the latter only uses sample data collected from strictly urban consumers. 

What is the Monetary Index of Consumer Prices?

The individual HICP data is then aggregated to derive the Monetary Union Index of Consumer Prices (MUICP) or the Euro Area HICP, which is a cumulative measure of inflation across the European Union. 

The European Central Banks major task after formulating the MUICP is to articulate monetary policy in order to restrict the annual HICP rate to a maximum of 2 percent across the European Union.

Since its launch in 1998, the MUICP has consistently provided information and statistical analysis of consumer spending pertaining to all 11 member nations of the European Union that adopted the Euro as a common currency of the region.

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• Core Inflation
• Cost Push Inflation
• Demand Pull Inflation
• Wage Push Inflation
• Inflation Spiral (Wage-Price Spiral)
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• Basket of Goods and Services
• Indexing and Index Number
• Base Year
• Consumer Price Index
• Substitution Bias
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• Employment Cost Index
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• Producer Price Index
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