Question

why does inflation rate calculated on goods widely traded lead to discrepancy in inflation rates

Answer 1

Widely traded goods can always be subjected to speculation and the prices can fluctuate widely. This creates discrepancy in prices from one period to the next especially during short term.

Inflation rates are gauged to bring stability into the long term growth and return projections for investments. Hence widely traded goods may not provide the best option as anchor for inflationary expectations or current inflation due to the constant fluctuation of prices.