They need to carry out structural and fiscal reforms, which should aim to reduce rigidities and enhance the flexibility of labour and goods markets, via restraining tax wedges and by maintaining proper incentives regarding the demand and supply of labour, in a context of sound public finances.
Any index that endeavors to measure the cost of living should aim to be unbiased. That is, a serious examination of all available evidence should yield the conclusion that there is just as great a chance that the index understates the rate of growth of the target concept as there is that it overstates the truth.