NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH
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Measuring Real Consumption and CPI Bias under Lockdown Conditions

W. Erwin Diewert, Kevin J. Fox

NBER Working Paper No. 27144
Issued in May 2020
NBER Program(s):Productivity, Innovation, and Entrepreneurship

Millions of goods and services are now unavailable in many countries due to the current coronavirus pandemic, dramatically impacting on the construction of key economic statistics used for informing policy. This situation is unprecedented; hence methods to address it have not previously been developed. Current advice to national statistical offices from the IMF, Eurostat and the UN is shown to result in downward bias in the CPI and upward bias in real consumption. We conclude that the only way to produce a meaningful CPI within the lockdown period is through establishing a continuous consumer expenditure survey.

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Document Object Identifier (DOI): 10.3386/w27144

 
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