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Economy & Energy
No 41: December 2003 - January 2004
ISSN 1518-2932

seta.gif (5908 bytes)No 41 Em Português

 

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e&e No 41

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Opinion:

Inflation

Text for Discussion:

What affects the Brazilian Exports?

Article:

Energy Emissions – Brazil 1973/2003

Definitions and  Data:

Some Indexes of the Brazilian Inflation

Indexes of the American Inflation

 

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Economical Indexes (USA)

 

  1. CPI : The CPI is defined as a fixed-quantity price index, that is, a measure of the price change in a fixed market basket of consumption goods and services of constant quantity and quality bought on average by urban consumers, either for all urban consumers (CPI-U) or for urban wage earners and clerical workers (CPI-W). It is a ratio of the costs of purchasing a set of items of constant quality and constant quantity in two different time periods.

    The Consumer Price Index (CPI) is a way of tracking the cost of living. It is computed based on prices for the "market basket" of necessities including housing, food and beverages, transportation, apparel, entertainment, medical care, and other goods and services. The CPI is updated monthly based on the Department of Labor surveys. To track the effects of price increases, the years 1982 to 1984 are set as a basis (equal to 100). A price index of 33, therefore, indicates that the price was one-third that of the average in 1982-1984.

  1. Wholesale Price Index/WPI : The Wholesale Price Index (WPI) was the original name of the Producer Price Index (PPI) program from its inception in 1902 until 1978, when it was renamed (PPI). At the same time, emphasis was shifted from one index encompassing the whole economy, to three main indexes covering the stages of production in the economy. By changing emphasis, BLS eliminated the double counting phenomenon inherent in aggregate commodity-based indexes.

  1. Producer Price Index/PPI The Producer Price Index (PPI) is a family of indexes that measures the average change over time in selling prices received by domestic producers of goods and services. PPIs measure price change from the perspective of the seller. This contrasts with other measures, such as the Consumer Price Index (CPI), that measure price change from the purchaser's perspective. Sellers' and purchasers' prices may differ due to government subsidies, sales and excise taxes, and distribution costs.

  1. Deflator A value that allows data to be measured over time in terms of some base period, or, in more obscure terms, an implicit or explicit price index used to distinguish between those changes in the money value of gross national product which result from a change in prices and those which result from a change in physical output. The import and export price indexes produced by the International Price Program are used as deflators in the U.S. national accounts. For example, the Gross Domestic Product (GDP) consists of Consumption Expenditures+ Net Investment + Government Expenditures + Exports - Imports. Various price indexes are used to "deflate" each component of the GDP in order to make the GDP figures comparable over time. Import price indexes are used to deflate the Import component (i.e. Import Volume is divided by the Import Price index) and the Export price indexes are used to deflate the Export component (i.e. Export Volume is divided by the Export Price index).

Indexes Values

In Figure 1 it is shown the behavior of three indexes (CPI, PPI and GDP Deflator) from 1948 on and in Figure 2 we compare the consumer price index and the wholesale price index (or producer index) with the GDP deflator.

It can be observed that the GDP deflator has less sharp variations and in most of the years its value remains between the consumer and wholesale indexes and this makes sense since the deflator uses as “basket of products” all the production of the country. Since the indexes have statistical imprecision and are calculated using different methodologies this rationale is not always true when the indexes are calculated by different organizations.

 

                               Data: IMF (For 2003,value of June)

Figure 1: GDP deflator had less sharp variations in its behavior and in most of the period its values remained between the consumer and wholesale indexes.

Figure 2: Consumer and wholesale price indexes compared with the GDP implicit deflator.

In Table 1 are shown the annual values from the IMF data base available at the Internet

 

Table 1: Values of American Price Indexes relative to 1995

 

CPI

GDP
DEFLATOR

PPI

 

CPI

GDP
DEFLATOR

PPI

1948

15,638

17,009

22,181

1967

21,903

25,701

26,778

1949

16,014

17,043

21,071

1967

21,903

25,701

26,778

1950

15,788

17,346

21,903

1968

22,827

26,807

27,447

1951

17,051

18,623

24,402

1969

24,063

28,123

28,52

1952

17,427

18,888

23,72

1970

25,482

29,621

29,551

1953

17,559

19,108

23,392

1990

85,743

88,188

93,174

1954

17,635

19,285

23,443

1991

89,374

91,398

93,381

1955

17,578

19,63

23,518

1992

92,081

93,623

93,935

1956

17,842

20,291

24,275

1993

94,799

95,87

95,311

1957

18,453

20,939

24,993

1994

97,271

97,866

96,547

1958

18,957

21,431

25,325

1995

100

100

100

1959

19,132

22,304

25,376

1996

102,931

101,936

102,345

1960

19,421

22,62

25,401

1997

105,337

103,921

102,278

1961

19,63

22,873

25,312

1998

106,973

105,202

99,74

1962

19,849

23,183

25,372

1999

109,313

106,715

100,574

1963

20,09

23,442

25,305

2000

113,004

108,959

106,386

1964

20,353

23,793

25,356

2001

116,198

111,535

107,561

1965

20,693

24,238

25,861

2002

118,041

 

105,083

1966

21,312

24,929

26,711

2003

120,551

 

110,61

Graphic Edition/Edição Gráfica:
MAK
Editoração Eletrônic
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Revised/Revisado:
Tuesday, 11 November 2008
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