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The fixed basket multilateral Walsh index for international price and real expenditure comparisons

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  • Abe, Naohito
  • Rao, D.S. Prasada

Abstract

The multilateral Walsh index is the only symmetric average fixed basket price index that satisfies transitivity, country symmetry, and invariance to proportional changes in quantities. Superior axiomatic properties and empirical results demonstrate suitability of the index for international price comparisons.

Suggested Citation

  • Abe, Naohito & Rao, D.S. Prasada, 2022. "The fixed basket multilateral Walsh index for international price and real expenditure comparisons," Economics Letters, Elsevier, vol. 220(C).
    • Handle: RePEc:eee:ecolet:v:220:y:2022:i:c:s0165176522003317
    DOI: 10.1016/j.econlet.2022.110857
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    References listed on IDEAS

    as
    1. J. Peter Neary, 2004. "Rationalizing the Penn World Table: True Multilateral Indices for International Comparisons of Real Income," American Economic Review, American Economic Association, vol. 94(5), pages 1411-1428, December.
    2. Abe, Naohito & Rao, D.S. Prasada, 2022. "Transitivity, Substitution Bias and the Fixed Basket Multilateral Walsh Index for International Price and Real Expenditure Comparisons," RCESR Discussion Paper Series DP22-1_v2, Research Center for Economic and Social Risks, Institute of Economic Research, Hitotsubashi University.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Price comparisons; Transitivity; Proportionality; Real expenditures;
    All these keywords.

    JEL classification:

    • E31 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Price Level; Inflation; Deflation
    • C43 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: Special Topics - - - Index Numbers and Aggregation

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