Inhaltszusammenfassung

The inflation rate is a key input for economic policy making. Recently, however, numerous empirical studies have reported significant upward bias in measured inflation. Part of this measurement bias is related to the compilation of accurate price data. The other part, attributable to the price index formulas themselves, is called here spurious inflation. This paper demonstrates, that spurious inflation is a more pervasive problem than the existing literature, focusing on commodity substitutio...The inflation rate is a key input for economic policy making. Recently, however, numerous empirical studies have reported significant upward bias in measured inflation. Part of this measurement bias is related to the compilation of accurate price data. The other part, attributable to the price index formulas themselves, is called here spurious inflation. This paper demonstrates, that spurious inflation is a more pervasive problem than the existing literature, focusing on commodity substitution bias, would suggest. Two screening tests are proposed to assess the susceptibility of price index formulas to spurious inflation. Some widely used price index formulas fail these tests.» weiterlesen» einklappen

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Klassifikation

DDC Sachgruppe:
Wirtschaft