Where the inflation calculator's math comes from

The inflation calculator does one piece of arithmetic: your amount × (index now ÷ index then). That trick — comparing a price basket across time by turning it into a single number — didn’t start with any government statistics office. It started with a dispute over £5.

A bishop settles an argument, 1707

In 1707, the English bishop William Fleetwood was asked a very specific question: was it fair to strip an Oxford scholar of his fellowship for owning an estate worth more than £5, when that £5 limit had been set back in 1440? To answer it, Fleetwood had to work out what £5 in 1440 was actually worth in 1707’s money. He tracked prices of corn and other staples across nearly 600 years to do it, and published the result as Chronicon Preciosum. It’s the first serious attempt anyone made at what the calculator above still does: express an old amount of money in today’s terms.

The first actual index number, 1764

Fleetwood compared prices across time, but didn’t boil it down to one index figure. That step came nearly 60 years later from Giovanni Rinaldo Carli, an Italian nobleman, who in 1764 calculated the price ratios of three commodities — grain, wine, and oil — to measure how much cheaper money had gotten since the 1500s, after silver and gold flooded into Europe from the Americas. Carli’s number is usually credited as the first true price index.

From one-off calculations to a formula, 1822–1874

For the next century, index numbers stayed one-off exercises done by individuals for a specific question, the way Fleetwood and Carli had done them. Joseph Lowe changed that in 1822 by setting out, in general terms, how to build an index out of a whole basket of goods rather than a handful — the approach now called the Laspeyres method. Two German economists then gave the field its two standard formulas: Étienne Laspeyres in 1871 (weight the basket by old quantities) and Hermann Paasche in 1874 (weight it by current quantities). Statistical offices still argue over which of the two to use — more on that in a future page.

Turning it into a government number

Measuring inflation stayed academic until governments needed it for policy. The U.S. Bureau of Labor Statistics started surveying family spending in 1888–1890, began systematically collecting retail food prices in 1901, and published its first city-level price indexes in 1919 — the direct ancestor of every national CPI in use today.

So the calculator above isn’t running 2026 math. It’s running a 300-year-old idea — turn a basket of prices into one number, then compare that number across time — that a bishop started to settle an argument about a scholarship.

In Malaysia: this history’s modern end point is the Department of Statistics Malaysia’s CPI — the exact series behind the numbers in the inflation calculator above.