Avoiding Anomalies of GDP in Constant Prices by Conversion to Chained Prices
AbstractChanging the base year (1985) of Philippine GDP in constant prices could change the growth rate and the shares of components even when there is no change in the volume of production, implying that the changes in growth rate and shares are anomalous (i.e., no real basis). This possibility weakens GDP in constant prices as basis for valuing our economys production and analyzing its growth performance. This paper demonstrates that conversion to chained prices avoids the above anomalies and also shows smaller and shrinking agriculture and industry sectors and enlarging services sector that is now over 50 percent of the Philippine economy than are shown by valuation in constant 1985 prices. In both contributions to level and growth of GDP, chained prices accentuate more than constant 1985 prices the declining importance of agriculture and industry and the rising importance of services in Philippine economic transformation.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by East Asian Bureau of Economic Research in its series Macroeconomics Working Papers with number 22632.
Date of creation: Jan 2008
Date of revision:
Contact details of provider:
Postal: JG Crawford Building #13, Asia Pacific School of Economics and Government, Australian National University, ACT 0200
Web page: http://www.eaber.org
More information through EDIRC
Real GDP; constant prices; chained prices; Fisher index;
Find related papers by JEL classification:
- C43 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: Special Topics - - - Index Numbers and Aggregation
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Diewert, W. E., 1976. "Exact and superlative index numbers," Journal of Econometrics, Elsevier, vol. 4(2), pages 115-145, May.
- Whelan, Karl, 2002. "A Guide to U.S. Chain Aggregated NIPA Data," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 48(2), pages 217-33, June.
- Dumagan, Jesus C., 2002. "Comparing the superlative Tornqvist and Fisher ideal indexes," Economics Letters, Elsevier, vol. 76(2), pages 251-258, July.
- J. C. Dumagan & V. E. Ball, 2009. "Decomposing growth in revenues and costs into price, quantity and total factor productivity contributions," Applied Economics, Taylor & Francis Journals, vol. 41(23), pages 2943-2953.
- Diewert, W Erwin, 1978. "Superlative Index Numbers and Consistency in Aggregation," Econometrica, Econometric Society, vol. 46(4), pages 883-900, July.
- Joe Robjohns, 2007. "Methods explained: Contributions to growth rates under annual chain-linking," Economic and Labour Market Review, Palgrave Macmillan, vol. 1(6), pages 53-56, June.
- Balk, Bert M., 2004. "Decompositions of Fisher indexes," Economics Letters, Elsevier, vol. 82(1), pages 107-113, January.
- Yap, Josef T. & Cabalfin, Michael R., 2008.
"Sustainable Development Framework for Local Governance,"
DP 2008-33, Philippine Institute for Development Studies.
- Michael R. Cabalfin & Josef T. Yap, 2008. "Sustainable Development Framework for Local Governance," Development Economics Working Papers 22624, East Asian Bureau of Economic Research.
- Michael R. Cabalfin & Josef T. Yap, 2008. "Sustainable Development Framework for Local Governance," Governance Working Papers 22619, East Asian Bureau of Economic Research.
- Dumagan, Jesus C., 2008.
"Implementing US GDP in Chained Prices for Cross-country GDP Growth and Sectoral Comparisons: Application to Selected ASEAN Countries,"
DP 2008-28, Philippine Institute for Development Studies.
- Jesus C. Dumagan, 2008. "Implementing US GDP in Chained Prices for Cross-country GDP Growth and Sectoral Comparisons : Application to Selected ASEAN Countries," Macroeconomics Working Papers 22631, East Asian Bureau of Economic Research.
- Dumagan, Jesus C., 2009.
"Comparing GDP in Constant and in Chained Prices: Some New Results,"
DP 2009-08, Philippine Institute for Development Studies.
- Jesus C. Dumagan, 2009. "Comparing GDP in constant and in chained prices : Some new results," Finance Working Papers 22953, East Asian Bureau of Economic Research.
- Jesus C. Dumagan, 2009. "Comparing GDP in Constant and in Chained Prices : Some New Results," Macroeconomics Working Papers 22633, East Asian Bureau of Economic Research.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Shiro Armstrong).
If references are entirely missing, you can add them using this form.