Archive for the ‘Index Number’ Category

Existence and Uniqueness of PPP Indexes

Most indexes used for computation of purchasing power parities (PPP) are defined in this way: Suppose there are  j=1,...,m  countries and  i=1,...,n  commodities. PPP for jth-country is defined as a weighted average of prices of commodities in that country deflated by  world average price of the respected commodities. Continue reading

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Back Again

I am back again with the promise of regular updates starting with a good news. After a very lengthy process, this paper joint with Prasada Rao is officially accepted for publication in the Journal of Econometrics. Continue reading

Reliability of PPPs

Anyone with some background in economics is probably familiar with the concept of Purchasing Power Parities (PPP). It is a special price index used to convert countries’ national accounts (in local currencies) into comparable terms (e.g. US dollar). But how are PPPs actually computed and how reliable are they?. Continue reading