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First of all, the more capital-intensive an industry is the more it tends to oligopolistic/regulated prices. So, if you're going to exclude them from the price index because they exhibit inertia even if they have a large impact in consumers' shopping baskets or in economic flows generally, you're measuring something useless.
Second of all, I have recently developed this intuition that the more volatile prices and volumes are, the more inflation there is [for the physicists: I'm thinking this is related to the fluctuation-dissipation theorem - if I understood the latter I'd be able to tell you for sure]. So, if an industry sector displays price inertia, it should also display lower inflation than average. And so, by excluding it from the analysis, you get a high inflation estimate.
So, what are we doing? We're excluding the capital-intensive sectors of the economy from the price index, and we're introducing an upwards bias in the inflation estimate. Coincidentally, Krugman just wrote:
And all of this has a real, damaging effect on policy. The econ team at Goldman Sachs (not online) makes the interesting point that FOMC inflation forecasts are pulled up by a small group that keeps forecasting much higher inflation than anyone else; this in turn helps limit the Fed's willingness to support the economy. And the deficit hawks have, of course, killed any hope of more stimulus.
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