Reference Base Period

AAA

DEFINITION of 'Reference Base Period'

A year in which the Consumer Price Index is equal to 100, a reference base period that serves as a benchmark for future periods, allowing economists to judge levels of inflation. Currently, the reference base period is set between 1982 and 1984.

INVESTOPEDIA EXPLAINS 'Reference Base Period'

When a year is assigned a price level from the CPI, the reference base period can be used to convey how much inflation occurred. For example, if the current year has a CPI level of 115, this would mean that prices today have increased by 15% (115-100) from the base period of 1982-1985.

RELATED TERMS
  1. Constant Dollar

    An adjusted value of currency used to compare dollar values from ...
  2. Consumer Price Index - CPI

    A measure that examines the weighted average of prices of a basket ...
  3. Economic Indicator

    A piece of economic data, usually of macroeconomic scale, that ...
  4. Producer Price Index - PPI

    A family of indexes that measures the average change in selling ...
  5. Inflation

    The rate at which the general level of prices for goods and services ...
  6. Deflationary Spiral

    A deflationary spiral is when a period of decreasing prices (deflation) ...
RELATED FAQS
  1. What impact does inflation have on the time value of money?

    The impact that inflation has on the time value of money is that inflation decreases the value of a dollar over time. The ... Read Full Answer >>
  2. What are some of the risks of holding liquid assets?

    Liquid assets, such as cash or highly marketable securities, tend to offer lower returns than illiquid assets. This leaves ... Read Full Answer >>
  3. What does it signify if there is a large discrepancy between a nation's real and ...

    A large discrepancy between a nation's real and nominal GDP signifies inflationary or deflationary forces in the economy. ... Read Full Answer >>
  4. What are the risks associated with investing in a treasury bond?

    It's common for financial analysts and investment publications to refer to U.S. Treasury bonds (T-bonds) as risk-free investments. ... Read Full Answer >>
  5. How can stock dividends provide protection against inflation?

    Stock dividends protect against inflation by providing tangible returns that supplement capital returns from rising stock ... Read Full Answer >>
  6. How does money supply affect inflation?

    Definitions matter when describing the relationship between changes in the money stock, or total money supply, and inflation. ... Read Full Answer >>
Related Articles
  1. Investing Basics

    Economic Indicators That Do-It-Yourself Investors Should Know

    Understanding these investing tools will put the market in your hands.
  2. Economics

    Why The Consumer Price Index Is Controversial

    Find out why economists are torn about how to calculate inflation.
  3. Options & Futures

    The Consumer Price Index: A Friend To Investors

    As a measure of inflation, this index can help you make key financial decisions.
  4. Options & Futures

    Explaining The World Through Macroeconomic Analysis

    From unemployment and inflation to government policy, learn what macroeconomics measures and how it affects everyone.
  5. Economics

    The Importance Of Inflation And GDP

    Learn the underlying theories behind these concepts and what they can mean for your portfolio.
  6. Economics

    What Part of the Money Supply is M2?

    M2 is the part of the money supply economists use to analyze and predict inflation.
  7. Retirement

    Facing Retirement? Look Beyond 100% Bonds

    Retiring doesn't mean putting all your money in bonds. There are two things to consider when it comes to be invested in bonds: growth and inflation.
  8. Personal Finance

    Weak Oil, Sanctions' Bite, Mean Misery for Russia

    Low oil prices, coupled with crippling sanctions, will mean Russia will suffer declining growth and vicious inflation for at least the next two years.
  9. Stock Analysis

    Best ETFs for Inflationary Worries

    Inflation may have been muted over the last few years, but that doesn’t mean investors should forget about it.
  10. Economics

    Understanding the Fisher Effect

    The Fisher effect states that the real interest rate equals the nominal interest rate minus the expected inflation rate.

You May Also Like

Hot Definitions
  1. Fisher Effect

    An economic theory proposed by economist Irving Fisher that describes the relationship between inflation and both real and ...
  2. Fiduciary

    1. A person legally appointed and authorized to hold assets in trust for another person. The fiduciary manages the assets ...
  3. Expected Return

    The amount one would anticipate receiving on an investment that has various known or expected rates of return. For example, ...
  4. Carrying Value

    An accounting measure of value, where the value of an asset or a company is based on the figures in the company's balance ...
  5. Capital Account

    A national account that shows the net change in asset ownership for a nation. The capital account is the net result of public ...
  6. Brand Equity

    The value premium that a company realizes from a product with a recognizable name as compared to its generic equivalent. ...
Trading Center