National Price Level

Lawrence H. Officer ()
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Lawrence H. Officer: University of Illinois at Chicago

Chapter Chapter 7 in Essays in Economic History, 2022, pp 125-147 from Springer

Abstract: Abstract The analytical relationship between the national price level (PL) and the nontradable/tradable price-level ratio, as it varies with the purchasing-power-parity (PPP) index adopted, is crucial for proper theoretical and econometric analysis of PL. Only structural variables need be used to determine PL; monetary variables have a tenuous justification. Econometric evidence does not support the conventional view that per capita real income is the most important determinant of PL. Serious methodological problems exist in the use of Geary-Khamis PPP data for estimation of PL, whereas a Fisher-ideal-index PPP is pleasing both theoretically and empirically.

Keywords: National price level; Purchasing power parity; Geary-Khamis; Fisher; Laspeyres; Paasche; Walsh; Law of one price; Tradables; Nontradables (search for similar items in EconPapers)
Date: 2022
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Persistent link: https://EconPapers.repec.org/RePEc:spr:sprchp:978-3-030-95925-8_7

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DOI: 10.1007/978-3-030-95925-8_7

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