When I listen to discussions of monetary policy, I’m often struck by the extent to which outdated terms and concepts are fundamental to the conversation. I don’t mean that the academic discourse is backward—in fact, it moves along rather quickly. But discussions among practitioners, and in the financial press, fall back on the same obsolete ideas over and over.
Obsolete idea #1: The CPI as a central indicator for monetary policy
When the conversation turns to inflation, most of the time it’s assumed that we’re talking about the Consumer Price Index, as if that were the only price index that could conceivably matter. In reality, of course, there are plenty of other price indices—the Producer Price Index, the GDP deflator, nominal wages—with an equal or better claim to relevance in monetary policy. The CPI is not even close to the correct measure for the purposes of either output stabilization or efficient…
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Utopia, you are standing in it! 
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