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Policy Implications of the Boskin Commission Report

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Author Info
Martin Neil Baily
Abstract

The author supports the type of the back-of-the-envelope calculations of CPI bias that the Commission used so effectively to attract public attention to its report. In the area of quality adjustment, however, he criticizes the Boskin Commission for what he calls “premature extrapolation,” that is moving too quickly from a limited number of examples to a broad conclusion. He stresses the importance of high-quality data for policy decisions and observes that a better allocation of existing resources can improve economic statistics, suggesting that the creation of a unified statistical agency in the United States, like Statistics Canada, would streamline data collection and analysis. In terms of the issue of Social Security solvency, the author argues that use of the CPI to adjust social security benefits downward is not a preferred option. He concludes that the Commission should have advised Congress that it did not have an adequate scientific basis to recommend a specific quantitative adjustment to the CPI index used to adjust federal programs.

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Publisher Info
Article provided by Centre for the Study of Living Standards in its journal International Productivity Monitor.

Volume (Year): 12 (2006)
Issue (Month): (Spring)
Pages: 74-83
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Handle: RePEc:sls:ipmsls:v:12:y:2006:6

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Related research
Keywords: United States Boskin Commission Boskin Measurement Prices Consumer Price Index CPI Bias CPI Bias Consumer Price Index Bias

Find related papers by JEL classification:
O47 - Economic Development, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Measurement of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence
O51 - Economic Development, Technological Change, and Growth - - Economywide Country Studies - - - U.S.; Canada
C82 - Mathematical and Quantitative Methods - - Data Collection and Data Estimation Methodology; Computer Programs - - - Methodology for Collecting, Estimating, and Organizing Macroeconomic Data
E31 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Price Level; Inflation; Deflation
E61 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Policy Objectives; Policy Designs and Consistency; Policy Coordination
B41 - Schools of Economic Thought and Methodology - - Economic Methodology - - - Economic Methodology
C80 - Mathematical and Quantitative Methods - - Data Collection and Data Estimation Methodology; Computer Programs - - - General
E65 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Studies of Particular Policy Episodes

References listed on IDEAS
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  1. Ariel Pakes, 2002. "A Reconsideration of Hedonic Price Indices with an Application to PC's," NBER Working Papers 8715, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
  2. Boskin, Michael J, et al, 1998. "Consumer Prices, the Consumer Price Index, and the Cost of Living," Journal of Economic Perspectives, American Economic Association, vol. 12(1), pages 3-26, Winter. [Downloadable!] (restricted)
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This page was last updated on 2008-8-17.

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