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Dynamic Cost of Living Index for Storable Goods

Author

Listed:
  • Kozo Ueda

Abstract

Consumers hold inventory for future uses. This study investigates how such intertemporal decisions influence the cost-of-living index (COLI). To this end, I construct a simple dynamic model, in which goods are storable and nonresalable, and prices take either high (regular price) or low values (sales). I then introduce two types of dynamic COLIs. Simulation results show that neither index satisfies both monotonicity and the time reversal test.

Suggested Citation

  • Kozo Ueda, 2019. "Dynamic Cost of Living Index for Storable Goods," CAMA Working Papers 2019-88, Centre for Applied Macroeconomic Analysis, Crawford School of Public Policy, The Australian National University.
    • Handle: RePEc:een:camaaa:2019-88
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    File URL: https://crawford.anu.edu.au/sites/default/files/2025-01/88_2019_ueda.pdf
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    Cited by:

    1. Ueda, Kozo, 2020. "Dynamic cost of living index for storable goods," Economics Letters, Elsevier, vol. 189(C).
    2. repec:upd:utmpwp:033 is not listed on IDEAS
    3. Tsutomu Watanabe & Tomoyoshi Yabu, 2023. "The demand for money at the zero interest rate bound," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 38(6), pages 968-976, September.
    4. Kozo Ueda & Kota Watanabe & Tsutomu Watanabe, 2020. "Consumer Inventory and the Cost of Living Index: Theory and Some Evidence from Japan," CARF F-Series CARF-F-491, Center for Advanced Research in Finance, Faculty of Economics, The University of Tokyo.
    5. repec:upd:utmpwp:025 is not listed on IDEAS
    6. Kozo Ueda & Kota Watanabe & Tsutomu Watanabe, 2024. "Household Inventory, Temporary Sales, Price Indices," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 65(1), pages 217-251, February.

    More about this item

    Keywords

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    JEL classification:

    • C43 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: Special Topics - - - Index Numbers and Aggregation
    • D15 - Microeconomics - - Household Behavior - - - Intertemporal Household Choice; Life Cycle Models and Saving
    • E31 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Price Level; Inflation; Deflation

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