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Comparison of Consumer and Wholesale Prices Indices in India: An Analysis of Properties and Sources of Divergence

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  • Praggya Das
  • Asish Thomas George

Abstract

This paper provides a comparative assessment of CPI and WPI in terms of its key characteristics, particularly on the method of compilation, distributional properties and measures of underlying inflation. The paper further attempts a full reconciliation of inflation divergence between CPIs and WPI with particular emphasis on 2015-16. The analysis shows that differences in weight for similar items as well as differences in composition played a crucial role in determining the level and duration of observed divergence between the retail and wholesale prices inflation.

Suggested Citation

  • Praggya Das & Asish Thomas George, 2017. "Comparison of Consumer and Wholesale Prices Indices in India: An Analysis of Properties and Sources of Divergence," Working Papers id:11981, eSocialSciences.
    • Handle: RePEc:ess:wpaper:id:11981
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    References listed on IDEAS

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    1. Döpke, Jörg & Pierdzioch, Christian, 2001. "Inflation and the Skewness of the Distribution of Relative Price Changes: Empirical Evidence for Germany," Kiel Working Papers 1059, Kiel Institute for the World Economy (IfW Kiel).
    2. Aoki, Kosuke, 2001. "Optimal monetary policy responses to relative-price changes," Journal of Monetary Economics, Elsevier, vol. 48(1), pages 55-80, August.
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    Cited by:

    1. Behera, Harendra & Wahi, Garima & Kapur, Muneesh, 2018. "Phillips curve relationship in an emerging economy: Evidence from India," Economic Analysis and Policy, Elsevier, vol. 59(C), pages 116-126.
    2. Ashima Goyal & Prashant Parab, 2019. "Inflation convergence and anchoring of expectations in India," Indira Gandhi Institute of Development Research, Mumbai Working Papers 2019-023, Indira Gandhi Institute of Development Research, Mumbai, India.
    3. Ashima Goyal & Prashant Mehul Parab, 2019. "Modeling Consumers' Confidence and Inflation Expectations," Economics Bulletin, AccessEcon, vol. 39(3), pages 1817-1832.

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