Is the trend of our economy making luxuries affordable and necessities costly? The Spanish case

Abstract

The objective of the paper is remembering the existing aggregate macro-models, explain price inflation, present the problems that may arise in aggregate models and carry out a study to understand the breakdown of price inflation in Spain in the last 15 years. In order to do that first we’re going to describe the article that will be our starting point to carry out the paper and also the meaning of the different named concepts. The macro-economic problems generated by aggregation in economy will be presented. Moreover, an economic study about price evolution will be carried out, in order to better understand the breakdown of annual headline inflation. After the study will be carried out one can better observe the differences and similarities of the American case. In the Spanish case the good that increased its price the most were cigarettes, that is, they have increased or decreased necessary goods as well as leisure ones. However, in the American case, only the necessary ones increased.