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  4. Winter 1998
  5. Index Number Issues in the Consumer Price Index

Journal of Economic Perspectives

ISSN 0895-3309 (Print) | ISSN 1944-7965 (Online)

Index Number Issues in the Consumer Price Index

  • W. Erwin Diewert
Journal of Economic Perspectives
vol. 12, no. 1, Winter 1998
(pp. 47–58)
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Abstract

This paper addresses the following issues: what is an appropriate theoretical consumer price index that statistical agencies should attempt to measure; what are some of the possible sources of biases between the fixed base Laspeyres price index that statistical agencies produce and the theoretical cost-of-living index; and what factors will make the biases larger or smaller and how will the biases change as the general inflation rate changes? This paper addresses all of the issues mentioned above and discusses what statistical agencies can do to reduce the biases.

Citation

Diewert, W Erwin. 1998. "Index Number Issues in the Consumer Price Index." Journal of Economic Perspectives, 12 (1): 47–58. DOI: 10.1257/jep.12.1.47

JEL Classification

  • E31 Price Level; Inflation; Deflation
  • C43 Index Numbers and Aggregation; leading indicators
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