Money

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Monograph

Identifikator:: 1819853969

URN:: urn:nbn:de:zbw-retromon-207464

Document type:: Monograph

Author:: Cannan, Edwin http://d-nb.info/gnd/118666916

Title:: Money

Edition:: 6. ed.

Place of publication:: [London]

Publisher:: King

Year of publication:: 1929

Scope:: XII, 120 Seiten

Digitisation:: 2022

Collection:: Economics Books

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Chapter

Document type:: Monograph

Structure type:: Chapter

Title:: Part I. General principles

Collection:: Economics Books

MEASUREMENT OF VALUE - number of other commodities are treated in the same way, so that each stands at 100 for the base year and some other number, larger or smaller than 100 according as its price has risen or fallen, for the period to be compared with the base-year. Then, as each of the commodities stands at 100 for the base-year, the average or “index-number ”’ for that year will be 100, while the index number for the other date will be the average of a number of figures each of which may be above or below 100. When this index- number is above 100, the excess will indicate a rise of that much per cent. in the general level of prices, and when it is below the deficit will indicate a fall of that much. Thus in what is known as Sauerbeck’s index number, in which the base or standard period is the years 1867- 77 averaged, the index number for 1896 is 61 per cent. of the 1867-77 average; that for each of the years 1912 to 1914 is 85. Then there was an annual rise till 1920, for which the figure was 25I. An abrupt fall to 155 follows for 1921, since when the figures have been 131, 129, 139, 136, 126 and 122. (The figures for each year are the average of twelve end-of-month records, e.g. the 251 for 1920 is made up of figures rising from 245 in January to 266 in April and falling to 207 in December.) There are many difficulties in the construction of an index number, the chief being that of finding commodities which do not vary much in kind or quality, and have prices about which dispute is impossible, but none of the difficulties are sufficient to prevent the method from making it possible to mrove any substantial change in the 7-acral le~.! +“ ~~ices and to measure approxima. magnitude. Gran*- .znges in the general level of prices {3 v= ror t¢ discussion of the principles of index numbers, Bowlev, Elements of Statistics.

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