Measurement of inflation: An alternative approach

Eliyathamby A. Selvanathan () and Saroja Selvanathan
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Eliyathamby A. Selvanathan: Griffith Universityhttp://www.griffith.edu.au/school/gbs/afe/, http://www.griffith.edu.au/school/gbs/ibas/staff/home.html

Journal of Applied Economics, 2006, vol. IX, pages 403-418

Abstract: The stochastic approach to index numbers has attracted renewed attention in recent times (e.g., Clements and Izan, 1981 and 1987; Diewert, 1995; Giles and McCann, 1994; and Selvanathan and Rao, 1994). One of the attractions of this approach is that it provides standard errors for the index numbers. This paper reviews the stochastic approach and extends the existing work by presenting an alternative approach to measure the rate of inflation. This approach has been demonstrated using consumption expenditure data for three countries, Australia, the United Kingdom (UK) and the United States (US).

Keywords: stochastic approach; index numbers; inflation; standard errors (search for similar items in EconPapers)
JEL-codes: C43 (search for similar items in EconPapers)

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