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There is a substantial body of economic analysis concerning the construction of index numbers, desirable properties of index numbers and the relationship between index numbers and economic theory. A number indicating a change in magnitude, as of price, wage, employment, or production shifts, relative
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In contrast to a cost-of-living index based on the true but unknown utility function, a superlative index number is an index number that can be calculated. Thus, superlative index numbers are used to provide a fairly close approximation to the underlying cost-of-living index number in a wide range of
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is a statistical measure of change in a representative group of individual data points. These data may be derived from any number of sources, including company performance, prices, productivity, and employment. Economic indices track economic health from different perspectives. Examples include the
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While the CPI is a conventional method to measure inflation, it doesn't express how price changes directly affect all consumer purchases of goods and services. It either understates or overstates cost-of-living increases. This is the limitation of the CPI that is described as the index number
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For example, in the
Consumer Price Index, a reference year's "market basket" is assigned an index number of 100. In 2019 if a market basket price is 55 and the basket were to double the following year, in 2020, then the index would rise to 200. This is done by performing a simple calculation:
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There is no theoretically ideal solution to this problem. In practice for retail price indices, the "basket of goods" is updated incrementally every few years to reflect changes. Nevertheless, the fact remains that many economic indices taken over the long term are not really like-for-like
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Some indexes are not time series. Spatial indexes summarize real estate prices, or toxins in the environment, or availability of services, across geographic locations. Indexes may also be used to summarize comparisons between distributions of data within categories. For example,
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tracks the variation in prices for different consumer goods and services over time in a constant geographical location and is integral to calculations used to adjust salaries, bond interest rates, and tax thresholds for inflation.
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The index number problem is the term used by economists to describe the limitation of statistical indexing, when used as a measurement for cost-of-living increases.
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costs twice as much in 1970 as it did in 1960, its index number would be 200 relative to 1960. Index numbers are used especially to compare business activity, the
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Index, or real GDP, measures the level of prices of all-new, domestically produced, final goods and services in an economy. Market performance indices include the
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Dividing the new year market basket price by the reference year's (otherwise known as the base year) price, and subsequently multiplying the quotient by 100.
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or quantity compared with a standard or base value. The base usually equals 100 and the index number is usually expressed as 100 times the
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comparisons and this is an issue taken into account by researchers in
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to the magnitude at a specified point usually taken as 100.
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Some indices display market variations. For example, the
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Baumol, William J.; Blinder, Alan S. (14 June 2011).
581:"Currency Converter | Foreign Exchange Rates | OANDA"
141:may lack focus or may be about more than one topic
1876:Mathematical and quantitative methods (economics)
507:Consumer Price Index Manual: Theory And Practice.
224:Influential global financial indices such as the
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637:The New Palgrave Dictionary of Money and Finance
145:Please help improve this article, possibly by
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652:Macroeconomics : principles & policy
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94:. There might be a discussion about this on
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60:Learn how and when to remove these messages
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865:Econometrics
793:Price theory
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1379:Physiocracy
1323:Marginalism
1012:Information
952:Engineering
932:Development
927:Demographic
798:Game theory
775:Theoretical
456:Price index
352:Price index
306:reflecting
279:provides a
242:S&P 500
1850:Categories
1782:Economists
1655:Schumacher
1560:Schumpeter
1530:von Wieser
1450:von ThĂĽnen
1410:Economists
1309:Circuitism
1274:Humanistic
1269:Historical
1244:Ecological
1234:Democratic
1207:Chartalism
1197:Behavioral
1160:Mainstream
1121:Statistics
1116:Solidarity
1037:Managerial
1002:Humanistic
997:Historical
942:Ecological
907:Behavioral
488:References
476:Indexation
392:March 2023
350:See also:
324:employment
228:, and the
226:Global Dow
194:statistics
86:to readers
46:improve it
1700:Greenspan
1665:Samuelson
1645:Galbraith
1615:Tinbergen
1555:von Mises
1550:Heckscher
1510:Edgeworth
1389:Stockholm
1384:Socialist
1284:Keynesian
1264:Happiness
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1185:Mutualism
1180:Anarchist
1165:Heterodox
1062:Personnel
1022:Knowledge
987:Happiness
977:Financial
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922:Democracy
857:Empirical
767:Economics
422:problem.
316:commodity
277:Economist
262:job index
198:economics
155:talk page
147:splitting
52:talk page
1811:Category
1791:journals
1777:Glossary
1730:Stiglitz
1695:Rothbard
1675:Buchanan
1660:Friedman
1650:Koopmans
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1620:Robinson
1505:Marshall
1355:Lausanne
1259:Georgism
1254:Feminist
1202:Buddhist
1192:Austrian
1091:Regional
1067:Planning
1042:Monetary
972:Feminist
917:Cultural
912:Business
723:SG Index
700:Archived
635:(eds.),
434:See also
240:and the
163:May 2020
104:May 2020
1826:Outline
1797:Schools
1789: (
1750:Piketty
1745:Krugman
1610:Kuznets
1600:Kalecki
1575:Polanyi
1465:Cournot
1460:Bastiat
1445:Ricardo
1435:Malthus
1425:Quesnay
1328:Marxian
1219:Chicago
1149:history
1144:Schools
1131:Welfare
1101:Service
892:Applied
681:(1958).
236:. The
202:finance
82:may be
1735:Thaler
1715:Ostrom
1710:Becker
1705:Sowell
1685:Baumol
1590:Myrdal
1585:Sraffa
1580:Frisch
1570:Knight
1565:Keynes
1540:Fisher
1535:Veblen
1520:Pareto
1500:Menger
1495:George
1490:Jevons
1485:Walras
1475:Gossen
1399:Thermo
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1072:Policy
1027:Labour
992:Health
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322:, and
304:figure
299:is an
200:, and
1821:Lists
1816:Index
1767:Lists
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1725:Lucas
1690:Solow
1680:Arrow
1670:Simon
1635:Lange
1630:Hicks
1605:Röpke
1595:Hayek
1545:Pigou
1515:Clark
1430:Smith
1345:Mixed
1304:Post-
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1106:Socio
1096:Rural
312:ratio
308:price
206:index
204:, an
1756:more
1480:Marx
1470:Mill
1455:List
1333:Neo-
1289:Neo-
656:ISBN
597:2016
567:2016
541:2016
516:ISBN
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