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Since the beginning of 2022, prices for food and energy have been rising sharply. In the low-income sector, this leads to financial emergencies, since the standard of living here is far below the standards of society anyway. On the other hand, the consequences of inflation can certainly be absorbed in the upper income brackets. Against this background, government measures should be concentrated on lower income brackets. Appropriate measures would be the payment of inflation compensation for those receiving basic security, a reform of the updating of basic security benefits and an income-related transfer payment for households without basic security. A solidarity surcharge on the income tax is proposed for financing.

Kultur, Verkehr oder öffentliche Daseinsvorsorge: Der Staat nimmt bei einer ganzen Reihe von Produkt- und Dienstleistungsgruppen eine aktive Rolle in der Preisbildung ein. Ohne diese staatliche Einflussnahme auf die Preise wäre der harmonisierte Verbraucherpreisindex am aktuellen Rand ganze zwei Prozentpunkte höher. Der aktuell dämpfende Effekt von staatlich administrierten Preisen auf die Inflation dürfte mit der Einführung des 9-Euro-Tickets zusammenhängen.

Inflationssorgen sind zunehmend wieder ein Thema in der Öffentlichkeit. Nach einer ausgedehnten Phase der Niedriginflation sind die Inflationsraten nun, teils auch durch gleichzeitig auftretende Sondereffekte, wieder angestiegen. Dies wirft vor allem Fragen danach auf, welche gesellschaftlichen Gruppen besonders von den Preisanstiegen betroffen sind. Als empirische Grundlage der vorliegenden Untersuchung dienen die Preisindizes des Statistischen Bundesamtes und Daten über das Konsumverhalten von Haushalten aus der Einkommens- und Verbrauchsstichprobe (EVS). Aus den berechneten individualisierten Preisindizes und Inflationsraten zeigt sich, dass ärmere Haushalte einer stärkeren Steigerung ihrer Lebenshaltungskosten gegenüberstehen als reichere Haushalte. Während die Lebenshaltungskosten der einkommensärmsten Haushalte langfristig, d.h. seit 1995, um 33,9 Prozent gestiegen sind, haben sich die Lebenshaltungskosten der einkommensreichsten Haushalte nur um 28,0 Prozent erhöht. Ein Grund hierfür ist, dass die ärmeren Haushalte einen größeren Anteil ihres Einkommens für Wohnen und Lebensmittel ausgeben, die recht stark im Preis gestiegen sind, während die einkommensreicheren Haushalte stärker Elektronikgeräte konsumieren, die qualitätsbereinigt im Preis gefallen sind. Zudem zeigt sich, dass sich ältere Haushalte einer höheren Steigerung der Lebenshaltungskosten gegenüberstehen als jüngere Haushalte. Während die Lebenshaltungskosten basierend auf dem Konsummuster eines 80-jährigen Haushalts langfristig um 42,6 Prozent gestiegen sind, haben sich die Lebenshaltungskosten basierend auf dem Konsummuster eines Haushalts im Alter von 18 bis 24 Jahren nur um 18,7 Prozent erhöht. Ein großer Unterschied liegt hier im Beitrag von Elektronikgeräten zur Inflationsentwicklung, die von den jüngeren stärker konsumiert werden als von älteren Haushalten. Während sich nur geringe Inflationsunterschiede zwischen Mietern und Wohneigentümern zeigen, sind deutlichere Unterschiede hinsichtlich der Arbeitsmarktpartizipation erkennbar. Angestellte weisen geringere Steigerungen ihrer Lebenshaltungskosten auf als Rentner, was auch auf die unterschiedlichen Konsummuster nach Alter zurückgeführt werden kann. Während die Lebenshaltungskosten basierend auf dem Konsummuster der Angestellten langfristig um 27,5 Prozent angestiegen sind, so haben sich die Lebenshaltungskosten basierend auf dem Konsummuster der Rentner um 37,9 Prozent erhöht. Bei den Lebenshaltungskosten von Single-Frauen finden sich langfristig höhere Inflationsraten als bei SingleMännern. Während die Lebenshaltungskosten der Frauen langfristig um 37,2 Prozent gestiegen sind, haben sich die Lebenshaltungskosten der Männer nur um 31,3 Prozent erhöht. Dies liegt unter anderem daran, dass die Männer einen höheren Anteil ihrer Lebenshaltungskosten für Elektronikgeräte ausgeben, die qualitätsbereinigt im Preis gefallen sind. Die Lebenshaltungskosten der Frauen sind in einem ähnlichen Ausmaß gestiegen wie die Lebenshaltungskosten der Alleinerziehenden, welche im Vergleich zu den Single-Männern ebenfalls weniger Geld für im Preis gefallene Güter ausgeben. Concerns about inflation are increasingly becoming a topic of public debate again. After an extended period of low inflation, inflation rates have now risen again, partly due to special effects occurring at the same time. This raises questions about which social groups are particularly affected by the price increase. The price indices of the Federal Statistical Office and data on household consumption behavior from the sample survey on income and consumption (EVS) serve as the empirical basis for this study. The calculated individualized price indices and inflation rates show that poorer households face a stronger increase in their cost of living than rich households. While the cost of living of the lowest-income households has increased by 33.9 percent over the long term, the cost of living of the highest-income households has increased by only 28.0 percent. One reason for this is that poorer households spend a larger share of their income on housing and food, which have risen quite sharply in price, while higher-income households consume more electronics, which have fallen in price after adjusting for quality. In addition, it appears that older households face higher cost-of-living increases than younger households. While the cost of living based on the consumption pattern of an 80-year-old household has increased by 42.6 percent in the long run, the cost of living based on the consumption pattern of a household aged 18 to 24 has increased by only 18.7 percent. A major difference here is the contribution of electronics to inflation, which are consumed more by younger than older households. While there are only minor inflation differences between renters and homeowners, differences are evident with regard to labor market participation. Employed persons show lower increases in their cost of living than retirees, which can also be attributed to differences in consumption patterns by age. While the cost of living based on the consumption pattern of white-collar workers has increased by 27.5 percent in the long run, the cost of living based on the consumption pattern of retirees has increased by 37.9 percent. Single women show a higher inflation rate in the long run than single men. While women's cost of living has increased by 37.2 percent over the long term, men's cost of living has increased by only 31.3 percent. This is due in part to the fact that men spend a higher share of their cost of living on electronics, which have fallen in price when adjusted for quality. The cost of living for women has increased to a similar extent as the cost of living for single parents, who also spend less money on goods that have fallen in price compared to single men.

Das Projekt analysiert die Preiswirkungen der Mehrwertsteuersenkung im Juli 2020 sowie die der entsprechenden Anhebung im Januar 2021 im Rahmen des Konjunkturpakets der Bundesregierung im Zuge der Corona-Pandemie. Die Untersuchung basiert auf Scannerdaten der GfK, die Informationen über die gezahlten Preise und gekauften Mengen von mehr als hundert Millionen Transaktionen im Betrachtungszeitraum beinhalten und ein umfassendes Abbild des Konsumverhaltens der deutschen Verbraucherinnen und Verbraucher ermöglichen. Die Ergebnisse zeigen, dass im Zuge der Mehrwertsteuersenkungen sowohl die Preise von schnell als auch von langsamen drehenden Konsumgütern in Deutschland substanziell gesunken sind. Diese Preissenkung fand unmittelbar nach Implementierung der Steuersenkung, also im Juli 2020, statt. Somit hat die temporäre Steuersenkung die Haushalte entlastet - dies trifft auch auf ärmere Haushalte zu, die im Zuge der Krise potenziell besonders betroffen sind. Insgesamt wurden rund 86% der Steuersenkungen an die Verbraucher weitergegeben. Die Weitergabe bei den Gebrauchsgütern betrug etwa 96%, bei den Verbrauchsgütern 76%. Unter Annahme plausibler intertemporale Substitutionselastizität ergeben sich Mengeneffekte im Bereich von rund 0,25% und 2%. Daraus lassen sich direkte Stabilisierungseffekte in Bezug auf das Bruttoinlandsprodukt von bis zu 0,3% ableiten. Im Januar 2021 kommt es zu einem Anstieg der Verbraucherpreise, der für Gebrauchsgüter annähernd symmetrisch zum beobachteten Rückgang im Juli 2020 ist und für Verbrauchsgüter etwas geringer ausfällt als der Preisrückgang sechs Monate zuvor. Endbericht: Im Auftrag des Bundesministeriums für Justiz und Verbraucherschutz (BMJV).

Das Statistische Amt der Europäischen Union veröffentlicht seit dem Jahr 1997 den harmonisierten Verbraucherpreisindex für das Euro-Währungsgebiet (HVPI-EWU). Der vorliegende Beitrag präsentiert Methodik und Ergebnisse und zeigt den Einfluss der indirekten Besteuerung auf die Preisentwicklung. Zudem wird auf pandemiebedingte Sondereffekte im deutschen HVPI eingegangen.

Um der Coronakrise mit ihren enormen Auswirkungen auf Gesellschaft und Wirtschaft zu begegnen, sind qualitativ hochwertige Statistiken unverzichtbar. Dabei kommt der Inflationsmessung – verstärkt durch die Überprüfung der geldpolitischen Strategie der Europäischen Zentralbank – besondere Bedeutung zu. Der Beitrag schildert die Praxis der Berechnung des nationalen Verbraucherpreisindex und des europaweit Harmonisierten Verbraucherpreisindex. Er geht auf aktuell besonders diskutierte Aspekte der Inflationsmessung – etwa den Umgang mit Qualitätsänderungen und die Einbeziehung von Vermögensgegenständen – ein. Weitere Themen sind die Herausforderungen der Preismessung und die Preisentwicklung während der Corona-Pandemie. Der Artikel ist eine Weiterentwicklung des Aufsatzes „Wird die ,wahre‘ Inflationsrate gemessen? Praxis der Inflationsmessung vor dem Hintergrund der Corona-Pandemie“ im Zeitgespräch „Corona-Krise, Inflationsziel der EZB und Inflationsmessung“ in Heft 11/2020 der Zeitschrift „Wirtschaftsdienst“. High-quality statistics are indispensable in responding to the coronavirus crisis and its enormous impact on society and the economy. Against this background, inflation measurement is of particular importance, which is reinforced by the review of the European Central Bank's monetary policy strategy. This article describes the practice of calculating the national consumer price index (CPI) as well as the Europe-wide Harmonised Index of Consumer Prices (HICP). It also addresses aspects of inflation measurement that are widely discussed at present, such as how to deal with quality changes and the inclusion of assets. Furthermore, the article considers the challenges of price measurement and the price development during the coronavirus pandemic.

Durch die Digitalisierung im Onlinehandel ist seit einigen Jahren ein neues Preissetzungsverhalten der Anbieter zu beobachten: dynamische Preissetzung. Dabei verwenden Anbieter maschinelle Algorithmen, um Preise von Produkten laufend an veränderte Marktsituationen anzupassen. Für die Verbraucherpreisstatistik stellt sich damit die Frage, inwieweit Anpassungen in der Datenerhebung für den Verbraucherpreisindex erforderlich sind. Das Statistische Bundesamt arbeitet deshalb seit einiger Zeit an der Automatisierung der Preiserhebung mittels Web Scraping. In diesem Zusammenhang wurde eine Studie durchgeführt, um optimale Handlungsempfehlungen für die langfristige Nutzung des Web-Scraping-Programms zu ermitteln. Der Aufsatz stellt das methodische Vorgehen und die Ergebnisse dieser Studie vor. As the result of digitalisation in online trade, a new price setting behaviour has been observed for several years: dynamic pricing. Vendors use automatic algorithms in order to adapt product prices continuously to changing market situations. Regarding consumer price statistics, the question arises whether adjustments are required in the process of collecting data for the consumer price index. For several years, the Federal Statistical Office has been working on the automation of price collection, using web scraping. A study has been conducted to provide recommendations for the optimal and long-term use of the web scraping program. This article presents the methodical approach and the findings of the study.

Scannerdaten sind digital verfügbare Kassendaten des Einzelhandels und eine neue vielversprechende Datenquelle zur Qualitätssicherung und Prozessoptimierung für die Preisstatistik. Im Zuge von Vorratskäufen und leeren Supermarktregalen zu Beginn der Coronakrise hat das Statistische Bundesamt die vorliegenden Scannerdaten auf das Kaufverhalten der Bürgerinnen und Bürger hin ausgewertet. Darüber hinaus konnten die Scannerdaten bei COVID-19-bedingten Erhebungsausfällen für die traditionelle Preiserhebung des Verbraucherpreisindex genutzt werden. Der Aufsatz beschreibt den Einsatz von Scannerdaten während der COVID-19-Pandemie, die angewendeten Methoden und die daraus resultierenden Ergebnisse. Scanner data are digitally available data of the retail sector. They are a new and promising data source for purposes of quality assurance and process optimisation of price statistics. In the cause of stockpiling purchases and empty supermarket shelves at the beginning of the corona crisis, the Federal Statistical Office analysed the available scanner data to determine the purchasing behaviour of citizens. In addition, scanner data were used to replace the prices which the traditional price survey for the consumer price index could not collect because of COVID-19. This article describes the use of scanner data during the COVID-19 pandemic as well as the methods applied and the results obtained.

Dynamische Preissetzung, also die laufende Anpassung von Preisen für Waren und Dienstleistungen an die Marktsituation durch die Verwendung maschineller Algorithmen, verbreitet sich im Onlinehandel immer stärker. Die derzeitige Praxis der monatlichen Preiserhebung und Berechnung des Verbraucherpreisindex berücksichtigt diese Entwicklung nur ansatzweise. Die dynamische Preissetzung könnte damit Verzerrungen im derzeitigen Verbraucherpreisindex verursachen. Aus diesem Grund hat das Statistische Bundesamt Preisdaten von Konsumartikeln des Kalenderjahres 2019 analysiert, die automatisiert in deutlich höherer Frequenz erhoben wurden als bei der traditionellen Preiserhebung üblich. Dieser Aufsatz beschreibt dynamische Preissetzungsverfahren ebenso wie Saison­ und Kalendereffekte in der Preissetzung und analysiert diese in Bezug auf ihr Verzerrungspotenzial für den Verbraucherpreisindex. Dynamic pricing, i.e. the frequent adaptation of prices for goods and services to the market situation through the application of automatic algorithms, is becoming increasingly common in online trade. The current practice of monthly price collection and computation of the consumer price index only partially incorporates this development. Hence, dynamic pricing could cause distortions in the current consumer price index. Therefore, the Federal Statistical Office has analysed price data of consumable articles of the calendar year 2019. They were collected automatically with much higher frequency than in the traditional price collection. This article describes dynamic price setting behaviour as well as seasonal effects and calendar effects and analyses them in relation to potential biases in the consumer price index.

Der Internethandel gewinnt stetig an Verbrauchsbedeutung und ist deshalb in der Berechnung der Inflationsrate entsprechend zu berücksichtigen. Die Messung eines repräsentativen Preises wird zusätzlich durch immer volatilere Preise bei bestimmten Produktgruppen oder Onlinehändlern erschwert, manuell ist die Preismessung bei volatilen Preisen nur noch schwer durchführbar. Aus diesem Grund setzt die Preisstatistik seit Jahren verstärkt auf die Datenerhebung mittels Web Scraping. Um die Verwendung dieser automatisierten Erhebungstechnik zu erleichtern, wurde eine generisch aufgebaute, web-basierte Anwendung entwickelt. Die Anwendung wird derzeit in der Preisstatistik schrittweise eingeführt und soll manuelle Internetpreiserhebungen für den Verbraucherpreisindex und den harmonisierten Verbraucherpreisindex bis Ende 2021 ersetzen. As e-commerce is continuously gaining in importance, it needs to be considered appropriately in calculating the inflation rate. Measuring representative prices has become more difficult because the prices of certain product groups or those specified by online retailers have become increasingly volatile, and a manual measurement of vola-tile prices is hardly feasible. For this reason, web scraping has been increasingly used to collect data for price statistics in recent years. A generic web-based application has been developed to facilitate the use of this automated data collection technique. The current gradual introduction of this application in price statistics is aimed at replacing the manual internet price collection for purposes of the consumer price index and the harmonised index of consumer prices by the end of 2021.

Das Statistische Amt der Europäischen Union veröffentlicht jeden Monat den harmonisierten Verbraucherpreis­index für das Euro-Währungsgebiet. Der Beitrag diskutiert die aktuelle Teuerung und zeigt den Einfluss von staatlich administrierten Preisen und indirekter Besteuerung. Zudem wird auf methodische Probleme eingegangen.

Am Beispiel der Wirtschaftswissenschaften wird untersucht, inwieweit Studierende die Qualität der Fachbereiche bei der Studienortwahl berücksichtigen. Im Rahmen eines Gravitationsansatzes zeigt sich, dass vor allem die Nähe zum Heimatort und die Lebenshaltungskosten am Ort der Hochschule die Studienortwahl bestimmen. Bezüglich der Qualität der Bildungsleistungen finden sich zwar keine signifikanten Effekte von Bewertungen im Rahmen von Umfragen bei Studierenden. Die positive Bewertung eines Fachbereiches durch Professoren aber geht mit höheren Studierendenzahlen einher ebenso wie die Höhe der eingeworbenen Drittmittel.

We examine the impact of large-scale asset purchases of government bonds on real GDP and the CPI in the United Kingdom and the United States with a Bayesian VAR, estimated on monthly data from 2009 M3 to 2013 M5. We identify an asset purchase shock with sign and zero restrictions. In contrast to the impulse response analysis in previous work, the reactions of real GDP and CPI are left unrestricted, so as formally to test whether these variables are affected by asset purchases. We then explore the transmission channels to the domestic economy and emerging markets. Our results suggest that asset purchases have a statistically significant effect on real GDP with a purchase of 1% of GDP leading to a .36% (.18%) rise in real GDP and a .38% (.3%) rise in CPI for the United States (United Kingdom). In the United States, this policy lowers yields on long-term government bonds and the real exchange rate. In the United Kingdom, on other hand, interest rate futures and measures of financial market uncertainty are more affected. There is also some evidence that emerging market sovereign bond and corporate bond spreads decline, with industrial production rising in response a positive asset purchase shock in either country.

Im Juli 2007 wurden die Milchpreise in Deutschland um 7 Cent je Liter angehoben, und für andere Molkereiprodukte wurden drastische Steigerungen angekündigt. Inzwischen ist auch bei Brot und Backwaren sowie bei Fleisch von deutlichen Preiserhöhungen die Rede. Verschiedentlich wird bereits gefordert, Sozialleistungen an die steigenden Lebensmittelpreise anzupassen. Die aktuellen Preisentwicklungen bei einer Reihe von Lebensmitteln haben indes nur geringe Auswirkungen auf die Inflation, und auch die besonderen Belastungen von Niedrigverdienern dürften sich in engen Grenzen halten. Seit Mitte der 90er Jahre sind die Preise für Nahrungsmittel in Deutschland wesentlich schwächer gestiegen als die Lebenshaltungskosten insgesamt, und das Preisniveau ist gegenwärtig eher niedriger als in den anderen größeren Ländern Westeuropas.

In this paper we aim to assess the mechanics of the global food price increases experienced in the recent years, most profoundly during the 2007-2008 food price spikes. At this stage, we aim to test, whether there is an empirically assessable relationship between World agricultural commodity prices, World oil prices and Hungarian producer and consumer food prices. After briefly discussing the background of the food price surge, and some studies empirically assessing it, we estimate a Vector Error Correction Model (VECM) with two long-run relationships, modelling vertical and horizontal price relationships (price transmissions). Preliminary results express (as somewhat expected for a small open economy as Hungary) that global developments have direct and significant effects upon price levels in Hungary regardless whether a vertical or horizontal price dimension is used. Further research will focus on determination of the magnitude, speed of occurrence and duration (needed to return to equilibrium) of the abovementioned global shifters express upon domestic agricultural and food price levels.

China’s economic development in recent decades has been tremendous, but subject to debate. This paper calculates regional prices that make incomes comparable across both time and space using the Engel-curve approach. Incomes are adjusted using these price indices, providing new estimates of inequality and poverty development. Our findings contrast with measures based on the official consumer price indices (CPIs) – in a time characterized by high economic growth, we find a larger increase in inequality and a more moderate poverty reduction than what is indicated by the CPI-adjusted measures.

This paper introduces an indicator of consumers' inflation expectations based on data from the National Consumer Confidence Survey of Mexico (ENCO, in Spanish), and tests its predictive power over CPI inflation and other measures of inflation that correspond to smaller baskets of consumer goods, for periods that range from 1 to 12 months. Our findings show that between January 2003 and September 2010, the predictive capability of the indicator over the different measures of inflation used was weak. Due to a modification in the survey questionnaire in October 2010, as of that date we observe a significant change in the responses and, thus, in the behavior of the indicator of consumers' inflation expectations. For this reason, from October 2010 on the main use of this indicator is to be a reference of consumers' confidence in price stability.

In this document we analyze the evidence of daily seasonality found in the weekly price variations of food, beverages, and tobacco in the Metropolitan Area of Mexico City. Our research is based on the daily price quotes of 2,724 goods, collected by Banco de México for the Consumer Price Index (CPI), in 434 commercial establishments between March 2009 and June 2010. We identify the weekday with the lowest weekly variation in prices, and find that it differs across products, types of commercial establishment, and supermarket chains. Moreover, we find that such a day of the week effect increases the volatility of the weekly variations of price quotes. These results establish the day of the week among the distinct characteristics of a price, a fact that must be taken into account while preparing calendars for CPI data collection.

The extent to which exchange rate fluctuations are passed through to domestic prices is of high relevance for open economies and for monetary authorities targeting price stability. Existing empirical studies estimating the exchange rate pass-through for Switzerland are based on either single equation estimation or on VAR models. However, these approaches feature some major drawbacks. The former cannot account for dynamic interactions between the time series and both methods disregard long-run equilibrium relations between the variable levels. This paper contributes to the evidence on the exchange rate pass-through in Switzerland by using a vector error correction model, which has the advantage of incorporating both short-run dynamics and long-run equilibrium relations among variables. The results reveal a significant impact of exchange rate shocks on various price (sub-)indices. Pass-through to import prices is substantial both in the short-run and in the long-run and occurs relatively quickly. It is slower, but still considerable in the long-run for the consumer price index and some of its sub-indices. Producer prices react significantly to exchange rate shocks as well. In contrast, consumer price inflation for services and for goods of domestic origin show hardly any significant response. The findings of this paper indicate a decline in the pass-through over time.

This paper develops a set of leading indicators of industrial production growth and consumer price inflation for the period 2001-2010. The choice of indicators is based on pseudo out-of-sample forecasting exercise implemented by Stock and Watson (2003), amongst others. We find that asset prices that reflect expectational factors or interest rates that capture the costs of borrowing for the Turkish economy tend to have the greatest predictive power for future real activity and inflation. Our findings provide evidence on the factors determining real activity and inflation in a period of disinflation and normalization for the Turkish economy.

The International Comparison Program (ICP) compares levels of economic activity and relative price levels among countries of the world. The main feature of the ICP is that it produces spatial indexes or purchasing power parities (PPPs) that allow cross-country comparison of gross domestic product (GDP) and its major aggregates. While the PPPs produced from ICP are spatial indexes, the consumer price index (CPI) is temporal and measures the changes in the average prices of a fixed basket of goods and services purchased by households from one period to another. This paper describes how information from the CPI can be used for intracountry comparisons of price levels (spatial comparisons) that would be consistent in the temporal dimension. In this way the output is temporally consistent subnational price levels (subnational PPPs) that can be used in regional price comparisons, real income dimension of human development indexes, poverty estimates, regional cost of living indexes, etc. This study aims to analyze the plausibility of integrating ICP with the Philippines' CPI by computing subnational PPPs using regional prices and expenditure weights from the CPI. This study also aims to find out whether prices collected for the CPI could be used to provide reliable estimates of price levels for a range of products in each region, and show if the relationships between these price levels are consistent with information coming from the ICP process. The current project using data collected from the Philippines' CPI has shown that the subnational price levels obtained from both the CPI and ICP processes are broadly similar. The study shows that all regional price movements are highly correlated, which is probably an indication of efficiency of the markets. However, the substitution effects cannot be studied right now as the only available expenditure structure at the time of subnational PPP estimation is for 2000. Incorporating substitution effects of changing expenditure patterns should improve the estimate.

In this paper I evaluate inflation targeting for ten countries. The evaluation is based on unconditional as well as conditional measures of the variance of inflation around target. With strict inflation targeting, expectations of the future deviation from target given information about the deviation from the target today should be equal to zero. Using the Consumer Price Index (CPI) when calculating the inflation rate, I find that the null hypothesis can be rejected for six of ten countries. In an extended approach I add lagged output gap as an information variable for countries where data was available. I then get the result that rational expectations and strict inflation targeting can be rejected for five countries. Out of the ten countries, the United Kingdom has conducted inflation targeting most in line with the theory of rational expectations and strict inflation targeting, and Poland the least.

In this paper we do a statistical analysis of the Mexican Consumer Price Index microdata set to characterize the rigidities of the price setting process in the different sectors of the Mexican economy. The microdata set goes from July 2002 to December 2009. Broadly, results show that there exists a considerable heterogeneity in the price setting behavior across different sectors and over time. Evidence was found that when big shocks affect inflation, there is a strong co-movement of the fraction of the firms that change prices with the level of inflation.

We use the shifts in Engel curves estimated from household surveys to estimate CPI biases in Argentina between 1985 and 2005. We find that real earning levels increased during this period between 4.3 and 5.7% faster per year than previously estimated. More surprisingly, relative to conventional wisdom, that income distribution has improved throughout this period.

The paper presents a consumer price index for Denmark 1502-2007. For the post-1815 period the index is based on existing CPI figures whereas new data has been constructed for the pre-1815 period. For the earliest years 1502-1712 the new CPI covers only the price of corn, whereas the period 1712-1800 is based on the comprehensive price material collected in relation to the recently completed Danish Price History Project. If one define price stability as an inflation rate around 2 per cent per annum, or lower, the past five centuries in Denmark has been dominated by price stability. Disregarding actual war periods there seems only to have been one major exception from the overall picture of price stability: The first four decades following the end of the Second World War where inflation expectations lost their anchor.

To monitor changes in absolute poverty across time, it is crucial to ensure that the established poverty line is a fixed standard of living that represents the minimum standard required by an individual to fulfill his or her basic food and nonfood needs. Typically, the food (component of the) poverty line is set with the cost of basic needs method, which entails determining the price of some nutritional benchmark through an artifice. In the Philippines, the official food poverty line is estimated at urban and rural areas of each province by using a one-day food menu as the artifice. These menus satisfy energy, and other nutrient requirements. We review the issues raised on this methodology, including the nutritional benchmarks, and propose an alternative approach for estimating the food poverty line using a representative food basket (and some spatial price indices to adjust for differences in cost of living). The proposed methodology addresses issues on consistency raised against the current official approach for setting food poverty lines.

A long lasting controversy in Sweden as well as internationally is how to best estimate a price on the services of owner occupied housing in a consumer price index. There is no international consensus and different approaches have been adopted. In this paper we use a true cost-of-living index suggested by one of the authors, apply the model to Swedish data and compare the results to the current Swedish CPI. We also show that within the economic model underlying the true cost-of-living index, alternative operationalizations of the index give rather different results. The choice between these alternatives depends upon the primary purpose of the index.

The quality of poverty estimates relies heavily on the data sources. One of the sources of data for poverty estimation in the Philippines is the retail price collected by the National Statistics Office. The retail prices are used, along with or in the absence of price data of certain commodities from the Bureau of Agricultural Statistics, for costing the poverty thresholds. This report contains the procedures of collecting, monitoring, and verifying the price data. It also discusses how special items are treated.

There is scant empirical support in the literature for the Fisher effect in the long run, though it is often assumed in theoretical models. We argue that a break in the cointegrating relation introduces a spurious unit root that leads to a rejection of cointegration. We applied new break tests and tested for nonlinearity in the cointegrating relation with post-war data for 15 countries. Our empirical results support cointegration, after accounting for breaks, and a linear Fisher relation in the long run. This is in contrast to several recent studies that found no support for linear cointegration.

In this paper we analyse in a mark-up framework the pass-through of commodity price and exchange rate shocks to the main components of producer and consumer prices. Thereby we link movements in prices at the different production stages as firms set their prices as a mark-up over production costs. The empirical results reveal significant linkages between different price stages in the euro area. The overall results are roughly in line with the literature and provide insight into the effects at different stages of the production chain. Non-energy commodity prices turn out to be important determinants of euro area prices.

This paper provides estimates of the exchange rate pass-through (ERPT) to consumer prices for nine central and eastern European EU Member States. Using a five-variate cointegrated VAR (vector autoregression) for each country and impulse responses derived from the VECM (vector error correction model), we show that ERPT to consumer prices averages about 0.6 using the cointegrated VAR and 0.5 using the impulse responses. We also find that the ERPT seems to be higher for countries that have adopted some form of fixed exchange rate regime. These results are robust to alternative normalisation of the VAR and alternative ordering of the impulse responses.

We propose a new core inflation measure for the Euro area which places the emphasis on the more lasting, i.e. persistent, price developments at a disaggregated level. The importance of each component of the HICP is reweighted according to its relative persistence, as measured by the sum of the autoregressive coefficients or by an indicator of mean reversion. Unlike headline inflation, our baseline core inflation measure is highly correlated with ECB monetary policy decisions, which could mean that it contains ex ante (pre monetary policy) information on inflationary pressure.

This paper presents a simple model of state-dependent pricing that allows identification of the relative importance of the degree of price rigidity that is inherent to the price setting mechanism (intrinsic) and that which is due to the price's driving variables (extrinsic). Using two data sets consisting of a large fraction of the price quotes used to compute the Belgian and French CPI, we are able to assess the role of intrinsic and extrinsic price stickiness in explaining the occurrence and magnitude of price changes at the outlet level. We find that infrequent price changes are not necessarily associated with large adjustment costs. Indeed, extrinsic rigidity appears to be significant in many cases. We also find that asymmetry in the price adjustment could be due to trends in marginal costs and/or desired mark-ups rather than asymmetric cost of adjustment bands.

An aggregation exercise is proposed that aims at in-vestigating whether the fast average adjustment of the disaggregate inflation series of the euro area CPI translates into the slow adjustment of euro area aggregate inflation. We first estimate a dynamic factor model for 404 inflation sub-indices of the euro area CPI. This allows to decompose the dynamics of inflation sub-indices in two parts: one due to a common "macroeconomic" shock and one due to sector specific "idiosyncratic" shocks. Although "idiosyncratic" shocks dominate the variance of sectoral prices, one common factor, which accounts for 30 per cent of the overall variance of the 404 disaggregate inflation series, is the main driver of aggregate dynamics. In addition, the heterogenous propagation of this common shock across sectoral inflation rates, and in particular its slow propagation to inflation rates of services, generates the persistence of aggregate inflation. We conclude that the aggregation process explains a fair amount of aggregate inflation persistence.

In this paper we analyse the Finnish consumer price changes from February 1997 to December 2004 on the basis of a set of microdata which covers over half of the items included in the Finnish CPI. Our findings can be summarised with four stylised facts. Firstly, only a small fraction of prices change monthly. In the period under review, an average 80% of prices remained unchanged in consecutive months. Secondly, price changes can be large in both directions. Thirdly, positive inflation is due to the higher number of price increases compared to decreases, and the magnitude of price changes is more or less in balance. Finally, the decomposition of monthly inflation to the weighted fraction of products with price changes and the weighted average of those price changes seems to give support for the time-dependent modelling of Finnish consumer prices, although signs of state-dependent pricing can also be found in the data.

Purchasing power adjusted incomes applied in cross-country comparisons are measured with bias. In this paper, we estimate the purchasing power parity (PPP) bias in Penn World Table incomes and provide corrected real incomes. The bias is substantial and systematic: the poorer is a country, the more its income tends to be overestimated. Consequently, international income inequality is substantially underestimated. Our methodological contribution is to exploit the analogies between PPP bias and the bias in consumer price index (CPI) numbers. The PPP bias, and consequently real incomes, is measured by estimating Engel curves for food, which is an established method of measuring CPI bias.

The influence of commodity prices on consumer prices is usually seen as originating in commodity markets. We argue, however, that long run and short run relationships should exist between commodity prices, consumer prices and money and that the influence of commodity prices on consumer prices occurs through a money-driven overshooting of commodity prices being corrected over time. Using a cointegrating VAR framework and US data, our empirical findings are supportive of these relationships, with both commodity and consumer prices proportional to the money supply in the long run, commodity prices initially overshooting their new equilibrium values in response to a money supply shock, and the deviation of commodity prices from their equilibrium values having explanatory power for subsequent consumer price inflation.

The most important economic measures are monetary. They have many different names, are derived in different theories and employ different formulas; yet, they all attempt to do basically the same thing : to separate a change in nominal value into a ?real part? due to the changes in quantities and an inflation due to the changes in prices. Examples are: real national product and its components, the GNP deflator, the CPI, various measures related to consumer surplus, as well as the large number of formulas for price and quantity indexes that have been proposed. The theories that have been developed to derive these measures are largely unsatisfactory. The axiomatic theory of indexes does not make clear which economic problem a particular formula can be used to solve. The economic theories are for the most part based on unrealistic assumptions. For example, the theory of the CPI is usually developed for a single consumer with homothetic preferences and then applied to a large aggregate of diverse consumers with non-homothetic preferences. In this paper I develop a unitary theory that can be used in all situations in which monetary measures have been used. The theory implies a unique optimal measure which turns out to be the Törnqvist index. I review, and partly re-interpret the derivations of this index in the literature and provide several new derivations. The paper also covers several related topics, particularly the presently unsatisfactory determination of the components of real GDP.

Regional patterns of inflation persistence have received attention only at a very coarse level of territorial disaggregation, that of EMU member states. However economic disparities within EMU member states are an equally important policy issue. This paper considers a country with a large regional divide, i.e., Italy, at a fine level of territorial disaggregation (NUTS3). Our results show that economically backward regions display greater inflation persistence. Moreover, we show that higher persistence is linked to a lower degree of competitiveness in the retail sector.

This paper provides some new empirical features on price setting behaviour for French producers using micro data underlying the producer and business-services price indices over the period 1994-2005. Some crucial methodological issues on the collection of producer prices are raised. Then, the main features of producers' price setting are presented: producer prices are modified quite frequently and by small amounts. A high heterogeneity across sectors is also observed: business-services prices change less often than industrial producer prices. The data lend some support to predictions of both time- and state-dependence models: Taylor contracts are not unusual but prices also respond to the changes in the firm's economic conditions. Nevertheless, time-dependent models are shown to be the most relevant theories to explain the producer price rigidity.