Measuring the Aggregate Price Level: Implications for Economic Performance and Policy

Robert J. Gordon, Richard G. Davis and Georg Rich

Chapter 8 in Price Stabilization in the 1990s, 1993, pp 233-276 from Palgrave Macmillan

Abstract: Abstract A comparison of economic performance of nations usually involves a minimum of three measures, the unemployment rate, inflation rate, and growth rate of real output per person (or per employee-hour).1 Of these three, the measurement of two (inflation and real output per person) requires an accurate estimate of the aggregate price level. The inflation rate, of course, is simply the rate of change of the aggregate price level, while real output is equal to nominal expenditure or income divided by the aggregate price level. In this sense accurate measurement of the aggregate price level is one of the most important tasks of national accounting.

Keywords: Monetary Policy; Price Index; Quality Change; Durable Good; Price Deflator (search for similar items in EconPapers)
Date: 1993
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DOI: 10.1007/978-1-349-12893-8_8

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