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AN ALTERNATIVE TO DOUBLE DEFLATION FOR MEASURING REAL INDUSTRY VALUE‐ADDED
Author(s) -
Durand René
Publication year - 1994
Publication title -
review of income and wealth
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.024
H-Index - 57
eISSN - 1475-4991
pISSN - 0034-6586
DOI - 10.1111/j.1475-4991.1994.tb00071.x
Subject(s) - deflation , economics , value (mathematics) , econometrics , macroeconomics , keynesian economics , microeconomics , mathematics , monetary policy , statistics
This article proposes a new method to compute the real value‐added of industries which would substitute for the traditional double deflation method. The new method consists of deflating industries' direct and indirect contributions to final demand deliveries (their value‐added by commodity) by the respective final demand commodity prices. The article shows that the new industry real value‐added measures have better statistical and analytical properties than those obtained by the double deflation method.