Modelling spatially correlated error structures in the time-space extrapolation of purchasing power parities

This book deals with the currently most relevant topics in price index numbers theory and practice. The problem of the harmonization of Consumer Price Indexes (CPIs) and the time-space integration of baskets is analyzed at the EU-zone level, with methodological and practical proposals on how to proceed for an overall treatment of the matter. Another issue is comparisons between Purchasing Power Parities (PPPs) and CPIs. Likewise, the construction of sub-indexes for households, economic and social groups is investigated, in order to obtain specific inflation measurement instruments. The book provides evidence from the most updated databases. Among the other issues treated in this book are spatial comparisons of price levels through PPPs and the international comparisons of macroeconomic aggregates, a re-consideration of index numbers theory, the measurement of production in non-market services, deflation problems, and price indexes in financial markets.