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Measuring real consumption and consumer price index bias under lockdown conditions
Author(s) -
Diewert W. Erwin,
Fox Kevin J.
Publication year - 2022
Publication title -
canadian journal of economics/revue canadienne d'économique
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.773
H-Index - 69
eISSN - 1540-5982
pISSN - 0008-4085
DOI - 10.1111/caje.12545
Subject(s) - economics , consumer price index (south africa) , consumption (sociology) , index (typography) , covid-19 , personal consumption expenditures price index , goods and services , price index , national accounts , consumer expenditure survey , public economics , econometrics , macroeconomics , monetary policy , consumer confidence index , economy , aggregate expenditure , computer science , medicine , social science , disease , pathology , sociology , world wide web , infectious disease (medical specialty)
Millions of goods and services are now unavailable in many countries due to the current coronavirus pandemic, dramatically impacting on the construction of key economic statistics used for informing policy. This situation is unprecedented; hence, methods to address it have not previously been developed. Current advice to national statistical offices from the International Monetary Fund, Eurostat and the United Nations is shown to result in downward bias in the consumer price index (CPI) and upward bias in real consumption. We conclude that, to produce a meaningful CPI within the lockdown period, it is necessary to establish a continuous consumer expenditure survey.