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Do Unit Value Export, Import, and Terms of Trade Indices Represent or Misrepresent Price Indices?

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Author Info

  • Mick Silver

Abstract

Unit value export and import indices compiled from returns to customs authorities are often used as surrogates for price indices in the measurement of inflation transmission, terms of trade (effects), and to deflate import and export value series to derive volume series. Their widespread use is mainly due to their relatively low cost compared with establishment price surveys. This paper provides evidence of substantial bias in their representation of such price changes. Their continued use would mislead economic analysis. The paper considers the efficacy of alternative strategies for their improvement, and argues for a move to establishment-based price surveys.

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Bibliographic Info

Paper provided by International Monetary Fund in its series IMF Working Papers with number 07/121.

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Length: 34
Date of creation: 01 May 2007
Date of revision:
Handle: RePEc:imf:imfwpa:07/121

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Related research

Keywords: Terms of trade; Export prices; Consumer price indexes; Producer price indexes; import price; statistics; surveys; standard deviation; trade effect; export price; survey; statistic; cointegration; import prices; prediction; monetary unions; foreign trade; external trade; producer price index; outlier; international trade; trade terms; algebra; standard deviations; terms of trade effects; equations; trade flows; world trade; maximum likelihood estimator; value of imports; correlation; trade effects; outliers; standard errors; granger causality; financial statistics; random samples; value of exports; export value; trade data; logarithms; samples; metal products; transport equipment; price discrimination; economic community; logarithm; sample size; global market; trade deficit; sampling; trade unit; export market; absolute errors; stochastic model; statistical classification; number theory; trade component; export markets; constant variance; area trade; merchandise trade;

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References

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  1. Hoffmann, Johannes & Kurz-Kim, Jeong-Ryeol, 2006. "Consumer price adjustment under the microscope: Germany in a period of low inflation," Discussion Paper Series 1: Economic Studies 2006,16, Deutsche Bundesbank, Research Centre.
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Citations

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Cited by:
  1. Julien Martin, 2010. "Markups, Quality and Transport Costs," Working Papers 2010-17, Centre de Recherche en Economie et Statistique.
  2. Guillaume Gaulier & Julien Martin & Isabelle Méjean & Soledad Zignago, 2008. "International Trade Price Indices," Working Papers 2008-10, CEPII research center.
  3. Konstantin M. Wacker, 2011. "The Impact of Foreign Direct Investment on Developing Countries’ Terms of Trade," Working Paper Series UNU-WIDER Working Paper W, World Institute for Development Economic Research (UNU-WIDER).
  4. Gabor Bekes & Balazs Murakozy & Zsuzsa Munkacsi & Gabor Oblath, 2013. "Unit Values, Unit Labor Costs and Trade Performance in Four Central European Countries," IEHAS Discussion Papers 1329, Institute of Economics, Centre for Economic and Regional Studies, Hungarian Academy of Sciences.
  5. Fu, Xiaolan & Kaplinsky, Raphael & Zhang, Jing, 2012. "The Impact of China on Low and Middle Income Countries’ Export Prices in Industrial-Country Markets," World Development, Elsevier, vol. 40(8), pages 1483-1496.
  6. Kerstin Stahn, 2007. "Has the Export Pricing Behaviour of German Enterprises Changed? Empirical Evidence from German Sectoral Export Prices," Journal of Economics and Statistics (Jahrbuecher fuer Nationaloekonomie und Statistik), Justus-Liebig University Giessen, Department of Statistics and Economics, vol. 227(3), pages 295-329, June.
  7. repec:ebl:ecbull:v:6:y:2008:i:5:p:1-15 is not listed on IDEAS
  8. Mick Silver, 2009. "An Index Number Formula Problem," IMF Working Papers 09/19, International Monetary Fund.
  9. Dominique Peters, 2010. "Price Competitiveness in Central and Eastern Europe - a case study for transition economies," IMK Studies 01-2010, IMK at the Hans Boeckler Foundation, Macroeconomic Policy Institute.
  10. Jarkko Turunen & Richard T. Harmsen & Tamim Bayoumi, 2011. "Euro Area Export Performance and Competitiveness," IMF Working Papers 11/140, International Monetary Fund.
  11. Ceglowski, Janet, 2010. "Exchange rate pass-through to bilateral import prices," Journal of International Money and Finance, Elsevier, vol. 29(8), pages 1637-1651, December.
  12. Roberto Álvarez; J. & Rodrigo Fuentes, 2009. "Entry into Export Markets and Product Quality Differences," Working Papers Central Bank of Chile 536, Central Bank of Chile.
  13. Lawrence L Schembri, 2010. "Discussion of Terms of Trade Shocks and Fiscal Cycles," RBA Annual Conference Volume, in: Renée Fry & Callum Jones & Christopher Kent (ed.), Inflation in an Era of Relative Price Shocks Reserve Bank of Australia.

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