Obama speaking about the FY 2014 budget  MANDEL NGAN/AFP/Getty
Images/Newscom    For example, if the price of bananas were to
rise from $0.40/lb to $10/lb, all but a small subset of the
population would stop buying bananas and instead buy more apples
and oranges. Using the current measure of inflation, however,
would assume that everyone keeps buying the same allocation of
fruit when bananas rise to $10/lb as they did when they were
$0.40/lb.    A more accurate inflation adjustment would seek to
maintain the same overall quantity and quality of a basket of
goods and services while not specifying precisely what
individual products and brands of products must be included in
that basket. This is precisely what the chained consumer price
index (CPI) attempts to track—a constant level of purchases that
allows for small changes in items and brands based on consumers’
responses to changes in prices.   Democrats and Republicans
alike should support a move to the chained CPI on pure policy
grounds. Moving to a chained