Abstract
Output prices are mismeasured because of inadequate adjustments for changes in product quality. Thus, when quality improves, inflation will be systematically over‐stated. In this study, I find that the most commonly used indicator of the rate of inflation, the Producer Price Index, misses about 40 percent of the change in quality. However, I also find that the mismeasurement of output prices is constant over time, implying that errors of measurement are not a significant determinant of either the slowdown or recent acceleration in manufacturing productivity.
| Original language | English (US) |
|---|---|
| Pages (from-to) | 11-32 |
| Number of pages | 22 |
| Journal | Economic Inquiry |
| Volume | 32 |
| Issue number | 1 |
| DOIs | |
| State | Published - Jan 1994 |
| Externally published | Yes |
ASJC Scopus subject areas
- General Business, Management and Accounting
- Economics and Econometrics