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Measuring inflation during the Pandemic with the benefit of hindsight

Dixon, Huw ORCID: https://orcid.org/0000-0002-9875-8965 and Chowdhury, Aftab Uddin 2024. Measuring inflation during the Pandemic with the benefit of hindsight. Open Economies Review 10.1007/s11079-024-09776-3

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Abstract

This study has adopted the actual household expenditure data from the national accounts to construct a true inflation rate (using the Fisher index) and found that the official inflation rate in the 33 OECD countries was an overestimate of true inflation for 23 and underestimate in 10 countries in the first wave of the COVID-19 pandemic. The result obtained for the countries where true inflation was higher than the official rate in this study matches the results obtained by Cavallo (2020) and Reinsdorf (2020). However, a significant difference has been detected for the countries where the official inflation exceeds the true measure in this study. The core reason behind the discrepancies is in the use of appropriate expenditure weights. This suggests caution in using credit-card based expenditure data when spending behaviour has changed dramatically.

Item Type: Article
Date Type: Published Online
Status: In Press
Schools: Business (Including Economics)
Subjects: H Social Sciences > H Social Sciences (General)
H Social Sciences > HA Statistics
H Social Sciences > HC Economic History and Conditions
Publisher: Springer
ISSN: 0923-7992
Date of First Compliant Deposit: 10 June 2024
Date of Acceptance: 10 June 2024
Last Modified: 23 Jul 2024 11:56
URI: https://orca.cardiff.ac.uk/id/eprint/169704

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