RAZAK KOJO OPOKU Writes…….
Steve Hanke, Professor of Applied Economics at the Johns Hopkins University in the United States of America has recently been on the neck of Akufo-Addo’s government, accusing the government of economic mismanagement and has consistently claimed to measure Ghana’s Inflation Rate on monthly basis since January 2022.
According to Professor Steve Hanke, he measured Ghana’s Inflation Rate at 83% for the Month of August, two times more than the official announced 33.9% by the Ghana Statistical Service(GSS).First and foremost, I would like to find out from Prof. Steve Hanke:
1. What is the global acceptability rate and trustworthiness of his “Hanke’s Inflation Dashboard”?
2. Is “Hanke’s Inflation Dashboard” more globally recognized, and the solely accredited platform for the computation of inflation figures for Countries around the world?
3. Is “Hanke’s Inflation Dashboard” superior to the IMF/World Bank’s Global Database for Inflation?
4. Is “Hanke’s Inflation Dashboard” more authentic and credible than the U.S. Bureau of Labor Statistics(BLS)?
Professor Steve Hanke has the academic liberty to express his opinion on the economy of Nations but I think that he has to do that in the context of accuracy of information and prevailing reality of the local economy.
Using the items consumed by Citizens of the United States of America to calculate the Inflation rate for other Sovereign Countries is completely misleading and a form of academic dishonesty on the part of Prof. Steve Hanke.
It is practically impossible to compare the development of inflation in different Countries as the methods used to measure Consumer Prices differ from one Country to another, attributed to what we called Quality Adjustments.
I would like to remind Prof. Steve Hanke that:
1. Citizens in different Countries buy different goods/products and services.
What Ghanaian Consumers prefer maybe completely different from the taste of Consumers in the United States of America.
2. There are different stages of the economic cycle of every Country as well as different rates of economic growth.
3. There are different patterns of developments in income and costs.
For instance, in the United States of America, Inflation rate is predominantly driven by its Monetary Policy while majority of the European Inflation is driven by Short-term Volatility of key Sectors of the economy.
In Ghana here, Monetary Policy seems to have little impact on the control of inflation since Bank of Ghana has implemented a quite number of monetary policy interventions since January 2022 yet still the Inflation keep rising.
Ghana’s Inflation keep increasing largely due to Imported Items which has been worsening by the invasion of Ukraine by Russia since most of our items are imported from that particular subregion.
China’s inflation is far lower than the inflation of United States of America but I don’t think that, Prof. Steve Hanke would publicly admit that, the Chinese economy is doing better than the economy of United States of America on the basis of China’s lower inflation rate.
The data of Ghana Statistical Service(GSS) cannot be undermined by “Hanke’s Inflation Dashboard”.
The 83% Inflation by Prof. Steve Hanke is very misleading and inappropriate since his Methodology is very Wrong. In the United States of America, CPI produced by *Bureau of Labor Statistics(BLS)* is the most widely used measure of Inflation.
The primary CPI (CPI-U) is designed to measure price changes faced by urban consumers, who represent 93% of the population of the United States of America.
The Bureau of Labor Statistics (BLS) uses a survey of American families known as the Consumer Expenditures Survey to determine which items should be in the inflation basket and how much weight to assign to each item.
Different prices are weighted according to how important they are to the average American Consumer.
It is very important to state that, America Citizens and American Federal Government DO NOT rely on “Hanke’s Inflation DashBoard” for economic decisions or for anything. The American Government and its Citizens rather
RELY on Bureau of Labor Statistics (BLS), similar in function to that of Ghana Statistical Service (GSS).
The Federal Government of United States of America uses a version of CPI known as the *CPI for Wage Earners and Clerical Workers* to adjust the Social Security Benefits for Inflation.
Another version of CPI known as the Chained Consumer Price Index for All Urban Consumers has been used to adjust Tax Brackets for inflation instead of the Primary CPI since Congress amended the law in 2017.
Finally, the Price Index for Personal Consumption Expenditures is another measure of inflation produced by the Bureau of Economic Analysis (BEA).
Professor Steve Hanke is NOT an Authority when it comes to measurement of Inflation even in his home Country, the United States of America.
The “Hanke’s Inflation Dashboard” by Professor Steve Hanke is NOT Accredited platform for the computation of inflation even in the United States of America.
Just recently, Prof. Steve Hanke predicted that, the United States of America is 80% chance of going into recession but his commentary was discredited by the Federal Bank of America.