Drift in Producer Price Indexes for the Former Soviet Union (FSU) Countries

By Kimberly D. Zieschang, François Lequiller

March 1, 1994

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Format: Chicago

Kimberly D. Zieschang, and François Lequiller. Drift in Producer Price Indexes for the Former Soviet Union (FSU) Countries, (USA: International Monetary Fund, 1994) accessed November 21, 2024

Disclaimer: This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate

Summary

The purpose of this paper is to show that, under the price fluctuations that characterize most transition economies, the commonly used chain index derived from the published month-to-month price change of the PPI in some cases dramatically overstates the rate of price inflation. The analysis is based in part on a seminal paper by Szulc, who studies the problem of drift for a wide class of index formulae, and in part on the observations of price movements made by the Fund’s missions. Greatest during the year 1992, the drift declines with slower rates of inflation and, possibly, with changing patterns of price increases, but is still important for countries such as Russia, where monthly inflation continues to run well into the double digits.

Subject: Inflation, Prices, Producer price indexes

Keywords: Inflation, Price fluctuation, Price movement, Price relative, Producer price indexes, Producer price indicator, Sauerbeck index, WP

Publication Details

Pages:

12
Volume:

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DOI:

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Issue:

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Series:

Working Paper No. 1994/035
Stock No:

WPIEA0351994
ISBN:

9781451978476
ISSN:

1018-5941

Notes

Also published in Staff Papers, Vol. 41, No. 3, September 1994.

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