Applying the Input-output Price Model to Identify Inflation Processes

2021 ◽  
Author(s):  
Michał Przybyliński ◽  
Artur Gorzałczyński
Keyword(s):  
Open Economy ◽  
Price Index ◽  
Consumer Price Index ◽  
Price Formation ◽  
Input Output ◽  
Price Model ◽  
Output Price ◽  
Ex Post ◽  
Starting Point ◽  
Overall Performance

Abstract We try to examine the potential of input-output price model to identify mechanisms of price formation and transmission. Contrary to previous research focused on overcoming the specific limitations of the model, we test its overall performance. In the presented study the historical values of the commonly used Consumer Price Index were decomposed according to the classic input-output price model for an open economy. A sequence of ex-post simulations under various assumptions was used to identify the sources of inflation. This study required the use of input – output tables in current and previous year’s prices. The proposed method of decomposition might be a starting point to create a framework for studying different aspects of inflation process.JEL: C67, E31, E37

scholarly journals Un modèle de projection des prix utilisant les relations intersectorielles de l’économie canadienne

2009 ◽  
Vol 51 (1) ◽  
pp. 71-85
Author(s):  
R. Rioux
Keyword(s):  
Commodity Prices ◽  
Price Formation ◽  
Input Output ◽  
Price Model ◽  
Primary Input ◽  
Time Period ◽  
Statistics Canada ◽  
The Impact ◽  
Push Model ◽  
Input Prices

This paper describes a simple cost-push price model which has been developed at the Structural Analysis Division of Statistics Canada. This price model is a traditional input/output cost-push model which has been adapted to utilize the rectangular industry by commodity input/output tables for Canada. It can be considered as the "dual" of the output model. Instead of analysing the propagation of demand through the economic system, the price model serves to analyse the propagation of factor prices throughout the system. The purpose of such a price formation model is to determine the impact on industry selling prices and domestic commodity prices arising from a change in impart commodity prices and primary input prices. This price model is of a static type; it accepts no substitutions and its structure is quite rigid. It is considered as being an annual model although it can be used for a different time period. This model is fully operational and is widely used by many government and private agencies.

scholarly journals Exchange Rate Pass Through in a Small Open Economy: A case study of West African Monetary Zone

2013 ◽  
Vol 9 (4) ◽  
pp. 275-290
Author(s):  
Rahman olanrewaju Raji
Keyword(s):  
Exchange Rate ◽  
Open Economy ◽  
Price Index ◽  
Time Series Data ◽  
Consumer Price Index ◽  
Import Price ◽  
Series Data ◽  
Import Prices ◽  
Pass Through ◽  
Exchange Rate Pass Through

The  study investigated the magnitude of exchange rate pass through to import prices and domestic prices    (consumer price index) in WAMZ economy using quarterly time-series data between 2000 and 2010 with the aids of Vector autoregressive (VAR) modeling technique supported with Johansen co-integration approach cross country analysis comprising of Gambia, Ghana, Nigeria and Sierra-Leone. The study discovered that transmission of exchange rate to import prices is more when compared with consumer price in the zone while the contributions of exchange rate to import price are not less 13 percent at average in entire zone. Consumer price index was explained by exchange rate pass through with an average of 26 percent in the zone where the pass through to consumer price is less than two percent in Ghanaian economy. The Taylor (2000) hypothesis was observed in the study where Ghana and Nigeria are the outlier economies while Nigeria established a positive relationship between interest rate volatility and exchange rate pass through to import prices.

Regional Consumer Price Differences Within Germany

2010 ◽  
Vol 230 (6) ◽  
Author(s):  
Stefan Linz
Keyword(s):  
Price Index ◽  
Consumer Price Index ◽  
Sufficient Information ◽  
Price Development ◽  
Price Data ◽  
Ex Post ◽  
Consumer Prices ◽  
Information Demand ◽  
Price Comparisons ◽  
Over Time

SummaryEvery month the Consumer Price Index for Germany (CPI) provides comprehensive and detailed information regarding the price development over time. However, when differences in the price level across regions in Germany have to be analysed at a given point in time, sufficient information is not available at present.Interest in regional consumer price data is shown by both scientists and policy makers. Currently, this information demand is not met as regional consumer prices or regional price comparisons are not provided by the Federal Statistical Office in Germany.Data available from the German Consumer Price Index is suitable to follow the price development over time but cannot be used directly to compare price levels of different regions because the goods tracked may be different from region to region.The article first considers the information demand and gives an overview of existing price data. Its main part refers to an empirical study which was conducted to check if existing Consumer Price Index data can be used to calculate regional consumer price comparisons by ex-post selecting comparable products.

scholarly journals UNDERSTANDING INDONESIA’S CITY-LEVEL CONSUMER PRICE FORMATION: IMPLICATIONS FOR PRICE STABILITY

2019 ◽  
Vol 22 (4) ◽  
pp. 405-422
Author(s):  
Paresh Kumar Narayan
Keyword(s):  
Price Index ◽  
Price Discovery ◽  
Consumer Price Index ◽  
Price Formation ◽  
Price Stability ◽  
Price Changes ◽  
Monthly Data

Using the Consumer Price Index (CPI) data of 82 Indonesian cities, we propose thehypothesis of heterogeneity in the cities’ contribution to the aggregate IndonesianCPI. Using a price discovery model fitted to monthly data, we discover that (1) of the23 cities in the province of Sumatera, five contribute 44% and nine contribute 66.7%to price changes, and (2) of the 26 cities in Java, four alone contribute 41.6% to pricechanges. Even in smaller provinces, such as Bali and Nusa Tenggara, one city alonedominates the change in aggregate CPI. From these results, we draw implications formaintaining price stability.

A new approach for the input–output price model

2011 ◽  
Vol 28 (1-2) ◽  
pp. 188-195 ◽  
Author(s):  
Nooraddin Sharify ◽  
Ferran Sancho
Keyword(s):  
Input Output ◽  
Price Model ◽  
New Approach ◽  
Output Price

scholarly journals Exchange Rate Pass-through in China: A Cost-Push Input-Output Price Model

2020 ◽  
Vol 31 (3) ◽  
pp. 513-528
Author(s):  
Yuwan Duan ◽  
Yanping Zhao ◽  
Jakob de Haan
Keyword(s):  
Exchange Rate ◽  
Input Output ◽  
Price Model ◽  
Output Price ◽  
Pass Through ◽  
Exchange Rate Pass Through

scholarly journals Proposition of a hybrid price index formula for the Consumer Price Index measurement

Equilibrium ◽  
2020 ◽  
Vol 15 (4) ◽  
pp. 697-716
Author(s):  
Jacek Białek
Keyword(s):  
Price Index ◽  
Consumer Price Index ◽  
Value Added ◽  
Index Formula ◽  
Time Interval ◽  
Hybrid Index ◽  
Starting Point ◽  
Laspeyres Index ◽  
Research Period ◽  
Special Case

Research background: The Consumer Price Index (CPI) is a basic, commonly accepted and used measure of inflation. The index is a proxy for changes in the costs of household consumption and it assumes constant consumer utility. In practice, most statistical agencies use the Laspeyres price index to measure the CPI. The Laspeyres index does not take into account movements in the structure of consumption which may be consumers' response to price changes during a given time interval. As a consequence, the Laspeyres index can suffer from commodity substitution bias. The Fisher index is perceived as the best proxy for the COLI but it needs data on consumption from both the base and research period. As a consequence, there is a practical need to look for a proxy of the Fisher price index which does not use current expenditure shares as weights. Purpose of the article: The general purpose of the article is to present a hybrid price index, the idea of which is based on the Young and Lowe indices. The particular aim of the paper is to discuss the usefulness of its special case with weights based on correlations between prices and quantities. Methods: A theoretical background for the hybrid price index (and its geometric version) is constructed with the Lowe and Young price indices used as a starting point. In the empirical study, scanner data on milk, sugar, coffee and rice are utilized to show that the hybrid index can be a good proxy for the Fisher index, although it does not use the expenditures from the research period. Findings & Value added: The empirical and theoretical considerations con-firm the hybrid nature of the proposed index, i.e. in a special case it forms the convex combination of the Young and Lowe indices. This study points out the usefulness of the proposed price index in the CPI measurement, especially when the target index is the Fisher formula. The proposed general hybrid price index formula is a new one in the price index theory. The proposed system of weights, which is based on the correlations between prices and quantities, is a novel idea in the price index methodology.

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