Quality (philosophy)

Macroeconomics

Theoretical physics

Producer price index

World Wide Web

Monetary policy

Philosophy

Inflation (cosmology)

Wholesale price index

Mid price

Price index

Economics

Computer science

Slowdown

Physics

Index (typography)

Monetary economics

Price level

Epistemology

Econometrics

Productivity

Relative price

Programming language

Economic growth

Industrial production index

Output gap

Consumer price index (South Africa)

Production (economics)

Constant (computer programming)

Economic Inquiry

Output prices are mismeasured because of inadequate adjustments for changes in product quality. Thus, when quality improves, inflation will be systematically over‐stated. In this study, I find that the most commonly used indicator of the rate of inflation, the Producer Price Index, misses about 40 percent of the change in quality. However, I also find that the mismeasurement of output prices is constant over time, implying that errors of measurement are not a significant determinant of either the slowdown or recent acceleration in manufacturing productivity.

ERRORS IN OUTPUT DEFLATORS REVISITED: UNIT VALUES AND THE PRODUCER PRICE INDEX