Discussion Paper Series in Economics, Department of Economics, Norwegian School of Economics (NHH)
Jan Tore Klovland
Challenges for the construction of historical price indices: The case of Norway, 1777-1920.
Abstract: This paper reviews some methodological and practical
problems encountered in the construction of historical price indices. The
underlying data sets in such studies are often characterized by
heterogenous and incomplete price series. It is shown that by using the
repeat sales method for constructing the subindices for individual
commodity groups some of the main problems can be overcome. The procedures
are illustrated by material from the construction of monthly price indices
for Norway from the year 1777 to 1920. The price indices shed new light on
two great wartime in ationary episodes in Norway: 1807-1817 and 1913-1920.
In spite of a 61-fold increase in the price level in the rst period and a
4-fold increase in the second, it is found that, after in ation had been
brought under control, prices reverted to a level consistent with the
purchasing power parity principle.
Keywords: Price index; price history; purchasing power parity.; (follow links to similar papers)
JEL-Codes: E31; N13; N14; (follow links to similar papers)
34 pages, March 5, 2014
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