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Degrees of processing and changes in the cyclical behavior of prices in the United States, 1869-1990

Research output: Contribution to journalArticlepeer-review

25 Scopus citations

Abstract

Price indices for periods before the Second World War place more weight on less-processed products than do their postwar counterparts, to an extent that exaggerates the change over time in the composition of aggregate output. Prices of less-processed products are especially procyclical in levels and inflation rates. Thus, comparisons between historical and postwar series can give biassed measures of changes in the cyclical behavior of the aggregate price level. Also, changes in the behavior of the aggregate price level must be distinguished from changes in the behavior of prices of given products, subject to a given degree of processing.

Original languageEnglish
Pages (from-to)35-53
Number of pages19
JournalJournal of Money, Credit and Banking
Volume31
Issue number1
DOIs
StatePublished - Feb 1999

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