Source: https://guthlabs.ai/docs/instruments/inflation-adjuster-cpi/mechanism/

instrument mechanism / verified-clean

# Inflation Adjuster (CPI) mechanism

The inspectable method record for Inflation Adjuster (CPI), kept separate from implementation and qualification.

Status: **VERIFIED_CLEAN**Lifecycle: **verified-clean**

## Model scope

The arithmetic and CPI-ratio method are correct under the stated annual-average CPI-U convention. Final release requires explicit resolution of the meaning of real_value, the exact CPI series and annual/monthly convention, the cumulative-inflation formula, and behavior for unavailable future years.

- The CPI ratio formula is standard for converting an amount from base-year dollars into equivalent target-year dollars: amount × CPI_target/CPI_base.

- The output name real_value is potentially misleading: this formula produces an inflation-adjusted nominal equivalent in target-year dollars, not a real value unless the direction and base of comparison are explicitly defined.

- The specification does not give the formula for cumulative inflation percentage; it should be (CPI_target/CPI_base - 1) × 100%.

- The CPI series definition is incomplete: it must explicitly specify CPI-U, U.S. city average, all items, annual average index, and the 1982-84=100 base. Monthly or December CPI values would produce different results.

- Future-year adjustment is not computable from a historical lookup table unless a forecast CPI table is separately supplied; the instrument should reject unavailable future years or clearly label forecast assumptions.

## Units and conventions

- amount is a monetary amount in consistent currency units, such as U.S. dollars; the formula does not convert currencies.

- CPI values are dimensionless index numbers, so CPI_target/CPI_base is dimensionless.

- The table is assumed to be U.S. CPI-U, U.S. city average, all items, annual average, with 1982-84=100.

- base year and target year refer to annual-average CPI years, not specific months.

- CPI values must be positive and present in the selected table vintage.

## Inspectable vector

One of 4 source-bound review vectors:

````
{
  "inputs": {
    "amount_usd": 100,
    "base_year": 1983,
    "target_year": 2023
  },
  "expected_outputs": {
    "inflation_adjusted_amount_usd": 304.702,
    "cumulative_inflation_percent": 204.702
  },
  "reference_data": {
    "cpi_u_annual_average_1983": 100,
    "cpi_u_annual_average_2023": 304.702,
    "source_convention": "Official BLS CPI-U annual-average historical table; U.S. city average, all items, 1982-84=100"
  },
  "working": "CPI ratio = 304.702 / 100.000 = 3.04702. Inflation-adjusted amount = $100.00 × 3.04702 = $304.702. Cumulative inflation = (3.04702 - 1) × 100% = 204.702%."
}
````

## Failure boundary

**BREAK_CLAIMED** · SELF_FLAGGED

An invalid or missing base-year lookup can produce CPI_base = 0 or an undefined CPI value; calculating instead of rejecting causes division by zero or an undefined result. The direction of the amount conversion is also convention-sensitive unless the interface clearly states that the amount is denominated in the base year and converted to the target year.

## Other records

[01**Overview**](<https://guthlabs.ai/docs/instruments/inflation-adjuster-cpi/>)[03**Implementation**](<https://guthlabs.ai/docs/instruments/inflation-adjuster-cpi/implementation/>)[04**Qualification**](<https://guthlabs.ai/docs/instruments/inflation-adjuster-cpi/qualification/>)

## Sources and evidence

These pointers bind the page to evidence. They do not grant authority or collapse verification into deployment.

- `VERIFIED_LEDGER.json`

- `evidence-tranche7/tranche7-results.json`

- `BOUNDARY_HAZARD_CATALOG.json`