Teaching Chain-Weight Real GDP Measures
AbstractIn 1996, the Bureau of Economic Analysis (BEA) changed the method used to calculate measures of real GDP from a Laspeyres or Paasche index to a Fisher ideal index, also called a chain-weight index. Even though this is a significant change in approach and has resulted in extensive revisions of reported statistics, many intermediate-level textbooks treat this topic casually, if at all. This article presents two applications in which this topic can be explored more thoroughly, with the help of spreadsheet software. One exercise introduces the concept of the chain-weight index by comparing it to Laspeyres, Paasche and ideal indexes with the use of utility analysis. The second exercise is a step-by-step process to calculate chain-weight index statistics.
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Bibliographic InfoPaper provided by College of the Holy Cross, Department of Economics in its series Working Papers with number 0206.
Length: 11 pages
Date of creation: Dec 2002
Date of revision:
Publication status: Published in Journal of Economic Education, Vol. 34:3, Summer 2003, pp. 224-234.
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Web page: http://www.holycross.edu/departments/economics/website/
More information through EDIRC
Teaching methods; Chain-weighting; GDP;
Find related papers by JEL classification:
- A22 - General Economics and Teaching - - Economic Education and Teaching of Economics - - - Undergraduate
- E10 - Macroeconomics and Monetary Economics - - General Aggregative Models - - - General
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.
- R. D. Rossiter, 2000. "Fisher Ideal Indexes in the National Income and Product Accounts," The Journal of Economic Education, Taylor & Francis Journals, vol. 31(4), pages 363-373, January.
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