Difference between revisions of "Double Deflation"
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| + | == Definition == | ||
| + | '''Double Deflation''' refers to a two-step process by which [[Intermediate Input]], [[Final Demand]], and [[Total Output]] valued at current prices in the accounting period are “deflated” by using commodity price indices (CPI) and subsequently deriving a value added price index that enforces the fundamental identity that the value of total outputs must always be equal to the value of total inputs. <ref>R.E. Miller and P.D. Blair, Input-Output Analysis: Foundations and Extensions, Second Edition, Cambridge University Press, 2009</ref> | ||
| + | |||
| + | == Issues and Challenges == | ||
| + | If deflators for intermediate inputs and/or gross output are not perfect, however, deflated value added figures will be distorted. | ||
| + | |||
| + | == References == | ||
| + | * Eurostat SUT Manual | ||
| + | <references/> | ||
| + | |||
[[Category:EEIO]] | [[Category:EEIO]] | ||
Latest revision as of 16:02, 28 February 2022
Definition
Double Deflation refers to a two-step process by which Intermediate Input, Final Demand, and Total Output valued at current prices in the accounting period are “deflated” by using commodity price indices (CPI) and subsequently deriving a value added price index that enforces the fundamental identity that the value of total outputs must always be equal to the value of total inputs. [1]
Issues and Challenges
If deflators for intermediate inputs and/or gross output are not perfect, however, deflated value added figures will be distorted.
References
- Eurostat SUT Manual
- ↑ R.E. Miller and P.D. Blair, Input-Output Analysis: Foundations and Extensions, Second Edition, Cambridge University Press, 2009
