Inflation and NIH Research Project Grants

Here we discuss how inflation has been relevant to NIH Research Project Grants (RPG), the largest component of extramural NIH funding. We can start with a straightforward question: What is inflation? The US Federal Reserve defines inflation as “the increase in the prices of goods and services over time.” Prices for research project grants may increase over time for a variety of reasons: Background inflation: Prices increase across the economy due to increases in the money supply and/or economy-wide demand and supply stresses; these are reflected in general price indices, such as the Gross Domestic Product (GDP) price index and the Consumer Price Index. Research-specific inflation: Prices increase specifically in the biomedical research and development enterprise; these are reported as the Biomedical Research and Development Price Index (or BRDPI). The BRDPI measures changes in the weighted average of the prices of all the inputs (e.g., personnel services, various supplies, and equipment) purchased with the NIH budget to support research. The weights used to construct the index reflect the actual pattern, or proportions, of total NIH expenditures on each of the types of inputs purchased. Theoretically, the annual change in the BRDPI indicates how much NIH expenditures would need to increase, without regard to efficiency gains or changes in government priorities, to maintain NIH-funded research activity at the previous year’s level. Figure 1 shows the BRDPI and GDP Price...
Source: NIH Extramural Nexus - Category: Research Authors: Tags: blog Open Mike Funding data RPG Source Type: funding