A Note of Dissent on the ‘Index Number’ Interpretation of Adam Smith's ‘Real Measure’

This paper offers a critical comment on the interpretation that Adam Smith's lsquo;real measure of exchangeable value' was addressed, at least in part, to the index number problem of estimating intertemporal changes in general purchasing power. It is argued that the lsquo;real measure' is incapable of performing such a role, that Smith was aware of its limitations in this respect, and that commentators have been misled by his (legitimate) use of the measure in more restrictive contexts