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Daily and annual returns

I got a task but i'm not even sure to understand what is the goal ; I have a serie of 503 daily returns (= 2 trading years) for a stock index, and I have to calculate the annual returns. I dont know ...
manux's user avatar
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Purchasing power parity and cointegrating vectors

I am testing for the existence of purchasing power parity (PPP) relationships using cointegration tests, among others, and I am a bit tempted to test whether or not my cointegrating vectors are equal ...
Pavel Filip's user avatar
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What is the meaning of "Nominal GDP was converted to 2021 dollars using the GDP Price Index" in ERP 2023?

Reading the Economic Report of The President 2023, there is a note under the real GDP graph stating: "Nominal GDP was converted to 2021 dollars using the GDP Price Index" What I understand ...
Omar's user avatar
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KPIs re-indexing after some years

I just realized that eurostat CPI index has three values of reference: 1996, 2005, 2015 ...
glezo's user avatar
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"Truck Transportation of Freight" would include tanker trucks that transport NGLs, correct? I'm looking at the Producer Price Index of transport

The producer price index I am referring to: enter image description here There are other categories as well, but I'm concerned specifically with "Truck Transportation of Freight": enter ...
Anon1313's user avatar
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Relative Importance Weights of USA CPI items

So for example in this release Table 2. Consumer Price Index for All Urban Consumers (CPI-U): U. S. city average, by detailed expenditure category, the Relative importance weights are stated. Now I ...
Howdy's user avatar
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Do stock indexes (S&P 500, DJ, ...) directly depend on inflation?

I can't understand what stock indexes really are. What they are representing? As far as I know, they represent relative change (in points) in the prices of shares of a given set of companies. Is that ...
sshd's user avatar
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Why do we need to divide by the CPI of year of reference when calculating inflation rate?

I know that inflation rate = $$ CPI_{n} - CPI_{n-1} \over CPI_{n-1}$$ but I wonder what's the point of dividing by $CPI_{n-1}$, CPI is already a percentage so inflation rate should be $ CPI_{n} - ...
AmirWG's user avatar
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What would be the issue if we approach inflation analysis without considering consumption bundles?

The CPI for use in calculating the rate of inflation is based off of Laspeyres' index, which is essentially the ratio of dot products of the price vector and a quantity vector. What kind of analysis ...
Panhaboth K's user avatar
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Should I care about the actual CPI value or just the rate of change?

I'm trying to understand the Y-axis of the Consumer Price Index for All Urban Consumers: New Vehicles in U.S. City Average: https://fred.stlouisfed.org/series/CUSR0000SETA01 BLS.gov states that the ...
randomx's user avatar
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How does "Buffet Indicator" work when market cap(nominator) is daily & GDP(denominator) is quarterly?

Simple question about "Buffet Indicator", but more like a question regarding the economic indicators in general. Buffet Indicator = mkt cap / GDP But as stated in the title, the market cap ...
user8491363's user avatar
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About the 9 tests on Index number theory to evaluate the efficency of the different types of price indexes

Correct me if I'm wrong, I've seen a section in Wikipedia about Index number theory and I've understand it as "if an index x (Laspeyres, Paasche, etc.) satisfies all of this test, then it's 100% ...
Verónica Rmz.'s user avatar
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275 views

How to rebase quarterly price index?

For rebasing annual price index, we divide all price indices by the value of the new base year. With quarterly price indices, there is not a single base year with the value 1.00. In the base year, ...
festakonik's user avatar
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1 answer
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Should Prices (or Price Indices) be modelled with deterministic trend?

I always face a dilemma on whether to assume prices to have a time trend or not while modelling. It is also partly a statistics problem. Let me explain. Assume I have time series, $y_t$ of price of a ...
Dayne's user avatar
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Mathematical question in macroeconomic task

I am currently working on a project where I want to explore how changes in a couple of currencies affects the income for my countrys exported fish. My country (Norway) sells it fish in 4 different ...
schix's user avatar
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What are indices in Economics?

Really, what are indexes in Economics? And bilateral and multilateral indexes? Take the Malmquist Index: it is a bilateral index, even though it uses four numbers: $Q_1$, $Q_2$, $Q_3$ and $Q_4$? And ...
Ramiro Magno's user avatar
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Comparing PPI weights for USA and GER

I am trying to explain why the size of producer price changes for Germany is significantly smaller than for the USA. For this purpose I wanted to look into the calculation method for both Producer ...
Martin Georg Haas's user avatar
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Why would an investor choose to invest in one index fund as opposed to another?

Assuming no transaction costs or management fees, why would an investor choose to invest in a fund tracking the Nikkei 225 over say the S&P500. If I was quite bullish on Japan, and I made the ...
Azman Rahman's user avatar
1 vote
0 answers
97 views

Difficulty Understanding CPI (Consumer Price Index)

Here's a question about CPI in my microeconomics text (Pindyck), which I don't seem to understand: The price of computers has fallen substantially over the past two decades. Use this drop in price ...
stoic-santiago's user avatar
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1 answer
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Manipulating index numbers

I have a producer price index which is the composite of 9 various commodity prices including that of coal. I want to remove the effects of coal price changes from the original index. I have data on ...
london's user avatar
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How can I adjust the base year of this price index?

I am given the following data for GDP deflator: 1997: 100.0 1998: 100.8 1999: 102.5 2000: 109.9 2001: 112.5 2002: 115.9 2003: 119.7 2004: 122.1 2005: 126.5 ...and so on. Currently, 1997 is ...
leecarvallo's user avatar
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1 answer
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What does the sun product of price times quantity divided by average price

I have a very simple question, what is the meaning, if any, of this? I.e. Economically what does the following calculation mean? $$ \left(\frac{(Q1\cdot P1)+(Q2\cdot P2)+(Q3\cdot P3)}{Q1 + Q2 + Q3}\...
user11015000's user avatar
1 vote
2 answers
433 views

Why are Big Macs supposed to cost the same around the world?

The Big Mac index is frequently mentioned in media, but I could never understand how it makes any sense. According to Wiki: The Big Mac Index is published by The Economist as an informal way of ...
JonathanReez's user avatar
6 votes
3 answers
1k views

What does a stock market index stand for?

I know that a stock market index (like S&P, NIKKEI, etc.) is computed from the prices of selected stocks, but I was wondering why the name of the currency is almost never expressed. For example, ...
AbateFaria's user avatar
1 vote
0 answers
22 views

Can the CPIH be used to find the real terms rise in price of a component of the basket of goods?

I want to calculate the real terms rise in UK private rent prices since 2011 using the CPIH measure. The indexes of nominal rent prices and the CPIH rose by 14.7% and 13.5% respectively, so I can say ...
John Smith's user avatar
1 vote
1 answer
47 views

Daily variable for inflation

I was wondering if there is a way to account for daily inflation data. I have daily short-term interest rates, and I would like to convert them to real short-term interest rates. Can I just average ...
tvmeijen's user avatar
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1 answer
68 views

Interpretation of price indices

How can cpi 3.41 and Wpi 3.54 be interpreted? I know that cpi gives the inflation rate but what is it that we understand from these figures?
Harry's user avatar
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2 votes
1 answer
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Measuring quantities for price indices?

I'm confused about how one acquires the data necessary to compute price indices--specifically, how one acquires quantity data. Suppose I wanted to compute the Laspeyres Index, defined as $\sum\...
SilasLock's user avatar
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1 answer
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Difference between chained CPI and normal CPI in simple terms

I am taking a community college level intro to macro course, and while self-studying the text, I came across the concept of C-CPI or chained CPI. While I feel I have a grasp as to what CPI is, I have ...
Dave's user avatar
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Distributing inflation in a hierarchical model

I am trying to distribute inflation in a hierarchical model. In both of the following two scenarios, the Laspeyres' Index over the entire data set is 1.8; However, in the first scenario, the ...
Him's user avatar
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1 answer
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How to calculate price index for natural gas in India?

Ministry of commerce and industry of India doesn't provide WPI index for Natural Gas. Is there a way to calculate the same?
Vivek's user avatar
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-1 votes
2 answers
1k views

Log relative price index - calculation question

I have US CPI prices & Canada CPI prices (where US is my base). I am trying to calculate the 'log relative price index'. Do I log the individual CPI prices first then calculate log Canada CPI/log ...
NewInvestor's user avatar
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1 answer
466 views

How to calculate constant GDP in international $ from nominal GDP in local currency units

I want to calculate a constant GDP serie from 1995 till 2014 based on nominal GDP expressed in Yuan (Chinese currency). I already get stuck on how to first make a constant GDP serie based on Yuan, ...
MaartendeG's user avatar