Understanding the space–time (in)consistency of the national accounts
Oulton, N.
(2015).
Understanding the space–time (in)consistency of the national accounts.
Economics Letters,
132, 21-23.
https://doi.org/10.1016/j.econlet.2015.04.009
(2015).
Understanding the space–time (in)consistency of the national accounts.
Economics Letters,
132, 21-23.
https://doi.org/10.1016/j.econlet.2015.04.009
Space–time consistency means that an earlier PPP, updated by relative inflation rates, equals a more recent PPP. I show that in the absence of data errors Divisia price indices are space–time consistent provided that the consumer’s utility function is homothetic.