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Adjusting for Inflation

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Abstract

As inflation raises the overall price level in an economy, the purchasing power of the dollar decreases and both borrowing and lending costs increase. The January 2023 issue of Page One Economics discusses how price indexes can be used to transform nominal wages and interest rates into real, or inflation-adjusted, values.

Suggested Citation

  • Diego Mendez-Carbajo, 2023. "Adjusting for Inflation," Page One Economics Newsletter, Federal Reserve Bank of St. Louis, pages 1-7, January.
    • Handle: RePEc:fip:fedlpo:95431
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