The national consumer price index averages the prices of many goods across the entire nation. But just because this index gets all the headlines doesn’t mean that all prices evolve in the same way. Certainly, there can be short-term differences in price. But it’s generally underappreciated that there can be longer-term differences as well. The graph above illustrates this by comparing a few MSAs in the United States: The differences in their price evolutions show that inflation at the local level is not entirely driven by a common currency. The same applies to countries under a monetary union, such as those from the European Monetary Union in the graph below. Put more simply, using the same currency does not mean the inflation rate will be the same everywhere. Why? First, the basket of goods used to compute the local price index may differ. Second, the relative prices of the local goods may vary, foremost housing and transportation. And third, the local business cycles are not synchronized, meaning that inflationary pressures may vary from place to place.

How these graphs were created: Play with the tags until you find your preferred set of series. For the first graph, it is useful to set the geography type to “msa” and choose “annual” for frequency. Then you can easily narrow down the set of series. For the second graph, “nation” and “eurostat” are good starting points. Once you have a list of series you’re happy with, select them and click on the “Add to graph” button.

Suggested by Christian Zimmermann