The consumer price inflation model described is intended to investigate the consumer price index (CPI) over a period of years and not over a period of months.
The hypothesis that the annual rate of growth in the US CPI is a function of the annual growth in the US broad money supply minus the annual growth in US real GDP minus the annual growth in US savings has been shown to be the case.
An exact relationship required the use of a non-zero residual term, RES(t), indicating underlying complexities in the inflation growth model.
This study recognizes limitations in its methodology, particularly in only measuring average annual American household savings, neglecting significant non-household savings.
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