The estimated contribution to changes in the forecasts is calculated using the medians of the members' forecasts for the CPI (all items less fresh food) and for the CPI (all items less fresh food and energy), and using the respective shares of each index in the overall CPI as weights. 2. In the right-hand chart, the contribution of changes in commodity prices, etc.
In a nutshell, bubbles are costly (in both directions) because they distort decision making and impede the optimal allocation of resources. As a bubble develops, people tend to build and purchase more housing than would be the case when prices reflect fundamentals, and lenders may divert investment to housing from alternative, more productive opportunities.