About Limitations of the Axiomatic and Economic Theories of Price Indices
https://doi.org/10.34023/2313-6383-2022-29-6-5-10
Abstract
The article considers provisions of axiomatic theory of Fisher indices, which is an important part of modern theory of price statistics and GDP international comparisons based on purchasing power parities. International recommendations concerning the computation of CPI and international comparisons of GDP, proposing different index formulas, are based on provisions of axiomatic theory although some require- ments for index formulas are not consistent with each other. The Fisher index formula meets time reversal and factor reversal requirements but fails to meet additivity and transitivity requirements and for these reasons cannot be used for multilateral comparisons of GDP. Most im- portantly, many experts in index theory believe that Fisher index does not have economic foundation. It is noted that axiomatic theory does not deal with many important problems of price statistics and represents the result of application of formal mathematical approach. Nevertheless, it is useful to take into account the provisions of this theory when interpreting recommended and published index formulas.
About the Authors
Yu. N. Ivanov
Lomonosov Moscow State University
Russian Federation
Russian Federation
Yuriy N. Ivanov – Dr. Sci. (Econ.), Professor; Scientific Director, Department of Statistics
GSP-1, 1-46, Leninskiye Gory, Moscow, 119991
T. A. Khomenko
Interstate Statistical Committee of the Commonwealth of Independent States (CIS-Stat)
Russian Federation
Russian Federation
Tat’yana A. Khomenko – Consultant
39, Myasnitskaya Str., Bldg. 1, Moscow, 107450
References
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Review
For citations:
Ivanov Yu.N., Khomenko T.A. About Limitations of the Axiomatic and Economic Theories of Price Indices. Voprosy statistiki. 2022;29(6):5-10. (In Russ.) https://doi.org/10.34023/2313-6383-2022-29-6-5-10
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