Additivity of national accounts reconsidered
It is well known that the use of chained indices in economic accounting systems leads to volume figures (deflated nominal values) that are inherently non-additive. This inconvenience for users is caused by a mathematical impossibility result. Recognizing this state of affairs, in this article a deflation method will be developed that uses chained indices of a certain functional form but leads to volume figures that exhibit additivity and can be nicely interpreted.
|Keywords||Additivity, Chained indices, National accounts, economic analysis|
Balk, B.M., & Reich, U.P.. (2008). Additivity of national accounts reconsidered. Journal of Economic and Social Measurement, 165–178. Retrieved from http://hdl.handle.net/1765/15118