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Price Statistics Compilation in 196 Economies: The Relevance for Policy Analysis

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Listed:
  • Francien Berry
  • Brian Graf
  • Mr. Michael Stanger
  • Mari Ylä-Jarkko

Abstract

The consumer price index (CPI) is a key economic indicator used to gauge inflation, adjust wages, pensions, and social benefits. The producer prices index (PPI) is used for forecasting and deflating GDP estimates. Both indexes are used by the Fund, policymakers, and researchers for global, regional, and domestic surveillance. In this context, the paper evaluates the soundness of the indexes by assessing four major criteria: frequency of updating the weights, the index coverage, timeliness, and the use of international classifications. We discuss online and scanner data as frontier issues. The study shows that the CPI is universally and frequently compiled, timely, and fairly-well aligned with international standards. However, the weights used to compile the index are updated in only 45 percent of economies and have national coverage in 76 percent. PPIs, compiled by only 126 economies are timely, but there is scope for continued improvement as only 36 percent of economies have updated PPI weights and approximately 67 percent maintain the recommended coverage. Outdated weights impact the reliability of the indexes for policy analysis. Frequently updated weights and well-represented coverage mitigate against biases and ensure that the indexes properly measure the price evolution in the economy.

Suggested Citation

  • Francien Berry & Brian Graf & Mr. Michael Stanger & Mari Ylä-Jarkko, 2019. "Price Statistics Compilation in 196 Economies: The Relevance for Policy Analysis," IMF Working Papers 2019/163, International Monetary Fund.
  • Handle: RePEc:imf:imfwpa:2019/163
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    References listed on IDEAS

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    1. Carare, Alina & Stone, Mark R., 2006. "Inflation targeting regimes," European Economic Review, Elsevier, vol. 50(5), pages 1297-1315, July.
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    Cited by:

    1. Moegi Inoue & Atsushi Kawakami & Ayako Masujima & Ichiro Muto & Shogo Nakano & Izumi Takagawa, 2021. "Final Demand-Intermediate Demand Aggregation System of Japan's Producer Price Index," Monetary and Economic Studies, Institute for Monetary and Economic Studies, Bank of Japan, vol. 39, pages 143-190, November.
    2. Chen,Xiaomeng & Mungai,Rose & Nakamura,Shohei & Pearson,Thomas Patrick & Wambile,Ayago Esmubancha & Yoshida,Nobuo, 2020. "How Useful is CPI Price Data for Spatial Price Adjustment in Poverty Measurement? : A Case from Ghana," Policy Research Working Paper Series 9388, The World Bank.

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