<abstract xmlns="http://www.w3.org/1999/xhtml">

<p>We re-estimate historical U.S. Producer Price Indexes (PPI) using the geometric Young formula at the elementary level. The geometric Young has better axiomatic properties than the modified Laspeyres, and may better approximate a feasible economic target. We find in most cases, indexes that use the geometric Young escalate between 0.1 and 0.3 percentage points less each year than those that use the modified Laspeyres. However, for wholesale and retail trade, as well as some other services, the differences are much larger. As a result, using the geometric Young at the elementary level lowers the U.S. PPI for Final Demand by 0.55 percentage points per year during the study period, a magnitude larger than what has been previously found for the U.S. Consumer Price Index.</p>
</abstract>

We re-estimate historical U.S. Producer Price Indexes (PPI) using the geometric Young formula at the elementary level. The geometric Young has better axiomatic properties than the modified Laspeyres, and may better approximate a feasible economic target. We find in most cases, indexes that use the geometric Young escalate between 0.1 and 0.3 percentage points less each year than those that use the modified Laspeyres. However, for wholesale and retail trade, as well as some other services, the differences are much larger. As a result, using the geometric Young at the elementary level lowers the U.S. PPI for Final Demand by 0.55 percentage points per year during the study period, a magnitude larger than what has been previously found for the U.S. Consumer Price Index.

The Geometric Young Formula for Elementary Aggregate Producer Price Indexes

Journal of Official Statistics

This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 3.0 License.

{"article-title":"The Geometric Young Formula for Elementary Aggregate Producer Price Indexes"}

We re-estimate historical U.S. Producer Price Indexes (PPI) using the geometric Young formula at the elementary level. The geometric Young has better axiomatic...

The Geometric Young Formula for Elementary Aggregate Producer Price Indexes

Data publikacji: 29 mar 2022

Zakres stron: 239 - 253

Otrzymano: 01 maj 2020

Przyjęty: 01 kwi 2021

DOI: https://doi.org/10.2478/jos-2022-0011

Słowa kluczowe
Inflation, Aggregation, geometric Young index, Jevons index

© 2022 Robert S. Martin et al., published by Sciendo

This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 3.0 License.

The Geometric Young Formula for Elementary Aggregate Producer Price Indexes

Data publikacji: 29 mar 2022

Zakres stron: 239 - 253

Otrzymano: 01 maj 2020

Przyjęty: 01 kwi 2021

DOI: https://doi.org/10.2478/jos-2022-0011

Słowa kluczoweInflation, Aggregation, geometric Young index, Jevons index

© 2022 Robert S. Martin et al., published by Sciendo

This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 3.0 License.

Słowa kluczowe
Inflation, Aggregation, geometric Young index, Jevons index