Showing papers on "Consumer price index published in 1987"

Gasoline Cost and Hedonic Price Indexes of U.S. Used Cars for 1970–1983 A Note

Abstract: Hedonic price indexes are estimated for U.S. used passenger cars for 1970–1983. A few notions of indexes that differ in the treatments of the expected present value of gasoline cost for driving a car over its remaining life are considered. Their relationships are obtained theoretically and examined empirically. Our indexes also are compared with the Consumer Price Index.

A Note on the International Comparison of Military Expenditures

Abstract: The comparison of military expenditures raises a number of technical, economic and political difficulties.1 These are due to differing monetary units from one country to another, conceptual differences, secrecy, and the statistical difficulty of treating different kinds of armament on the same footing.

Mismeasuring poverty and progress

Abstract: The Mistake In 1969 the federal government decided to change the method of adjusting the poverty line income each year. Instead ofchanging in proportion to the change in the cost of food, the poverty line henceforth was to be adjusted by the change in the overall Consumer Price Index. And so it has been. This technical change was a mistake, and the mistake has colored and distorted perceptions of the poverty problem. The change was a mistake because the CPI mismeasured the cost of owning a home—and badly mismeasured it during periods of inflation. Forany given year the CPI measured onlythe cost of buying a home, not the cost of living in it. The cost of homeownership was calculated as the full amount that would be paid by home buyers during the period that they could be expected to own the home, that is, the purchase price and the total amount of all mortgage payments for 15 years.’ These are large amounts, compared with the current incomes and expenditures ofmost households, but they were treated as expenses only for those who actually bought houses, about 3 percent of all households in a given year. For the other 60 percent that already owned a home and did not buy another one during the year, no homeownership costs were computed, other than current outlays for property taxes, insurance, and repairs.2

Towards the Formulation and Testing of a More General Theory of Macroeconomic Policy (1987)

Abstract: Virtually all the macroeconomic policy discussion in the literature is based on a very limited number of the possible alternative combinations of assumptions about the effects of changes in particular policy instruments on the principal macroeconomic objectives. At the monetarist extreme, budgetary instruments are taken to have no impact on the real variable of unemployment (or real output), whereas monetary policy is taken to influence the price level, with no more than a short-run influence on unemployment. At the other (‘Keynesian’) extreme, all the instruments are taken to have similar effects to one another in reducing unemployment, for any given effect on nominal aggregate demand, an effect that is transferred to the price level as full employment is approached. The possibility of different macroeconomic instruments having different relative effects from one another on the price level and on unemployment respectively has been relatively little discussed. Nor has the possibility that one or more of those instruments may have no effect on one of those objectives, whereas another instrument may affect both objectives.

Factors affecting grains prices, 1970-1984

Abstract: As grain prices went through a boom-to-bust cycle from the early 1970s to the mid 1980s, the factors contributing to these fluctuations became an important issue for agricultural trade. With that in mind, this paper attempts to quantify the importance of the various factors influencing such price movements during the 1970s and 1980s, hoping to bring about a better understanding of the current situation. This is done by means of simulation exercises using the World Bank's global econometric model of the grain markets. The paper discusses four specific factors which affected price movements during this time including fertilizer price changes, agricultural policy shocks, income growth rates and exchange rate movements. The paper concludes with the outlook for the grain market from the perspective of the events of the past 15 years.

The Postwar Evolution of Computer Prices

Abstract: This study constructs new hedonic price indexes for electronic computers covering the period 1951-84. Regressions are estimated for four data sets, two used in previous studies by G. Chow and E. Dulberger, and two new data sets used for the first time in this study. Coverage is limited to mainframes until the late 1970s, but includes both " super-mini" computers and personal computers in the 1980s. The end result is a price index that exhibits a 1951 index number, on a base 1984 = 100, of 147,692, implying an annual rate of price change over the 33 years of -19.8 percent. Price changes for personal computer (PC) processors during the 1982-86 period appear to have been similar to those for mainframe computers during the 1977-84 period, in the range of -20 to -25 percent per year. Evidence for PC peripheral equipment is limited to 1984-86 and indicates a faster rate of price decline than for processors, particularly if the increasing availability of "clones" is taken into account. The paper places considerable emphasis on problems of weighting price indexes for computers together with price indexes for other types of "Office, Computing, and Accounting Machinery" (OCA) and other types of producers' durable equipment (PDE). The methodology used to construct the implicit price deflators in the National Income and Product Accounts, with a fixed 1982 base year, leads to a significant downward bias in the implicit OCA and PDE deflators after 1982, and an upward bias prior to 1982. A particularly disturbing aspect of the present national accounts is a spurious rise in the implicit OCA deflator of 157 percent between 1957 and 1971, despite the fact that its computer component exhibits a price decline and its non-computer component increases by only 8 percent. The paper recommends adoption of a chain-linked Laspeyres index number for any price index aggregate that includes computers. A properly weighted PDE deflator, using our computer price index, declines relative to the official implicit PDE deflator by 0.74 percent per year during 1957-72 and 0.87 percent per year during 1972-84.

Quick and dirty forecasts of the consumer price index — how dirty?

Abstract: Many economists find it necessary to forecast inflation locally or nationally based on the annual Consumer Price Index (CPI) value before the figures are released from the Bureau of Labor Statistics. There is no regular “official release date,” although the BLS usually targets the 20th of each month to publish the CPI for the previous month. The official annual CPI value (the mean of the twelve months) is therefore not available until January 20 of the next year. This initial figure is often revised later as additional information becomes available.