Constructing Price Indexes across Space and Time: The Case of the European Union
American Economic Review · 2004 · Volume 94 · Issue 5
Abstract
This paper considers the problem of how to construct and reconcile price indexes across space and time. A general taxonomy of panel price index methods, containing four broad classes, is proposed, along with five criteria for discriminating between them. Methods from each of the four classes are then used to compute spatial and temporal price indexes for the 15 countries of the European Union (EU) over the period 1995–2000. Using these panel price indexes, I test whether or not price levels and relative prices converged across the EU over this period.
Keywords
Index Numbers and Aggregation, Leading indicators, Price Level, Inflation, Deflation, Industrial Organization and Macroeconomics: Industrial Structure and Structural Change, Industrial Price Indices
Enable JavaScript for citation tools and additional paper interactions.