prisnivån

In Nordic languages, prisnivån is the term used for the price level, the average level of prices for goods and services in an economy at a given time. It is a broad indicator of the value of money and the purchasing power of households. A rising price level reduces purchasing power and can erode real incomes if wages do not keep pace.

Measurement: In practice the price level is tracked with price indices such as the consumer price index (CPI), the harmonised index of consumer prices (HICP) in the EU, and the GDP deflator. Core measures exclude volatile items like food and energy. These indexes differ in scope and weighting and are reported monthly or quarterly.

Determinants: The price level is determined by aggregate supply and demand, monetary policy, exchange rates, commodity prices, taxes and subsidies, and expectations about future prices. In open economies, import prices and exchange rate shifts can influence the domestic price level.

Effects: A higher price level reduces real wages unless nominal wages rise. It affects interest rates, inflation expectations, debt burdens, and saving. Prolonged high price levels can affect competitiveness and living standards; stable price levels support planning and investment.

Policy relevance: Central banks commonly target inflation or price stability tied to the price level. Some economists advocate price level targeting, which aims to keep the cumulative price level close to a target path rather than just the rate of change. Data sources include national statistics offices and international bodies.