{"title":"Measuring Inflation During the Pandemic with the Benefit of Hindsight","authors":"Aftab Chowdhury, Huw Dixon","doi":"10.1007/s11079-024-09776-3","DOIUrl":null,"url":null,"abstract":"<p>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 (Inflation with covid consumption baskets, 2020) and Reinsdorf (COVID-19 and the CPI: Is inflation underestimated?, 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.</p>","PeriodicalId":46980,"journal":{"name":"Open Economies Review","volume":"29 1","pages":""},"PeriodicalIF":1.5000,"publicationDate":"2024-06-29","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":"0","resultStr":null,"platform":"Semanticscholar","paperid":null,"PeriodicalName":"Open Economies Review","FirstCategoryId":"96","ListUrlMain":"https://doi.org/10.1007/s11079-024-09776-3","RegionNum":4,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":null,"EPubDate":"","PubModel":"","JCR":"Q2","JCRName":"ECONOMICS","Score":null,"Total":0}
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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 (Inflation with covid consumption baskets, 2020) and Reinsdorf (COVID-19 and the CPI: Is inflation underestimated?, 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.
期刊介绍：
The topics covered in Open Economies Review include, but are not limited to, models and applications of (1) trade flows, (2) commercial policy, (3) adjustment mechanism to external imbalances, (4) exchange rate movements, (5) alternative monetary regimes, (6) real and financial integration, (7) monetary union, (8) economic development and (9) external debt. Open Economies Review welcomes original manuscripts, both theoretical and empirical, dealing with international economic issues or national economic issues that have transnational relevance. Furthermore, Open Economies Review solicits contributions bearing on specific events on important branches of the literature. Open Economies Review is open to any and all contributions, without preferences for any particular viewpoint or school of thought. Open Economies Review encourages interdisciplinary communication and interaction among researchers in the vast area of international and transnational economics. Authors will be expected to meet the scientific standards prevailing in their respective fields, and empirical findings must be reproducible. Regardless of degree of complexity and specificity, authors are expected to write an introduction, setting forth the nature of their research and the significance of their findings, in a manner accessible to researchers in other disciplines. Officially cited as: Open Econ Rev
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