In the last forty years, inflation in the service sector has consistently exceeded inflation in the rest of the economy. This article investigates whether the observed difference in inflation rates reflects upward bias in the measurement of service prices.

Some analysts have argued that broad measures of income growth for the 1980s misrepresented how well the typical worker or household fared during this period. This article examines trends in labor force participation and compensation to explain why real wages have not kept up with aggregate...