Economist have noted for decades that Consumer Price Index (CPI) in the developed countries is overstating inflation by 0,5-2,0% per year. A significant part of such a bias is found to be caused by the presence of technology products and differentiated products in CPI. An increasing weight of...

This paper explores the extent to which goods follow systematic pricing patterns over their life cycle. The theoretical literature, and anecdotal evidence, often suggests that new products are often introduced at high prices which decline as the good ages while, older goods exit the market at a...

Given the highly kurtotic and positively skewed characteristics of cross-sectional distribution of price, asymmetric trimmed-mean is the best approach in extracting the statistical medium-term trend of inflation. This paper uses asymmetric trimmed-mean approach to measure core inflation in...

This paper assesses the performance of the core inflation measures calculated by the Brazilian Central Bank (BCB). The evidence shows that they do not meet some key statistical criteria that a good core inflation should have: unbiasedness and the ability to forecast inflation. That performance...

Economists have been noting for decades that Consumer Price Index (CPI) in the developed countries is overstating inflation by 0,5−2,0% per year. A significant part of the bias is due to the presence of technology products and differentiated products in the CPI basket. An increase share of...

Stochastic approach to index number (and its change) has recently attracted renewed attention of researchers as it provides the standard error of index number (and its change). One of the most important uses of index number is in the case of measurement of the general price level in an economy...

Stochastic approach to index number (and its change) has recently attracted renewed attention of researchers as it provides the standard error of index number (and its change). One of the most important uses of index number is in the case of measurement of the general price level in an economy...

Quality adjustment of price indexes affects the analysis of many sensitive economic issues, such as real growth, productivity, international competitiveness, real wages, per-capita consumption and poverty, other than inflation. Hedonic methods are often recommended and increasingly used in the...

The note examines a generalization of a theorem of Bortkiewicz which relates the difference between a Paasche and a Laspeyres price index to a covariance between price and quantity relatives. The generalized theorem is used to demonstrate a number of interesting special applications. It turns...

Inflation is currently low and falling in the OECD area. A side effect of these facts is that they made harder the task of price index compilers. First of all, researchers and analysts are moving their attention from aggregate price dynamics to price differentials (among products, markets,...