Measuring consumer inflation in a digital economy

Marshall Reinsdorf and Paul Schreyer
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Marshall Reinsdorf: International Monetary Fund
Paul Schreyer: OECD

No 2019/01, OECD Statistics Working Papers from OECD Publishing

Abstract: The effect on the household consumption price index from possible sources of error in capturing digital products depends on the weight of the affected products. To calculate upper bounds for this effect, we apply weights based on the average structure of household consumption in OECD countries to a maximum plausible overstatement of price change for each affected or potentially affected product. The products account for about 35% of household expenditure in 2005, declining to 32% in 2015. The upper bound simulation effect on the growth rate of the consumption deflator is somewhat less than –0.6 percentage points in 2015 – large enough to improve the picture of GDP and productivity growth in advanced economies. However, this would not overturn the conclusion that productivity growth has slowed substantially compared over the past decades.

Keywords: cost of living index; digital replacements; digitalised economy; GDP growth; Inflation; productivity (search for similar items in EconPapers)
JEL-codes: C43 D11 D60 E01 E31 O47 (search for similar items in EconPapers)
Date: 2019-02-27
New Economics Papers: this item is included in nep-ict, nep-mac and nep-mon
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Citations: View citations in EconPapers (3)

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Persistent link: https://EconPapers.repec.org/RePEc:oec:stdaaa:2019/01-en

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