Teaching Chain-Weight Real GDP Measures
Document Type
Working Paper
Date of This Version
12-1-2002
Keywords
Teaching methods, Chain-weighting, GDP
Abstract
In 1996, the Bureau of Economic Analysis (BEA) changed the method used to calculate measures of real GDP from a Laspeyres or Paasche index to a Fisher ideal index, also called a chain-weight index. Even though this is a significant change in approach and has resulted in extensive revisions of reported statistics, many intermediate-level textbooks treat this topic casually, if at all. This article presents two applications in which this topic can be explored more thoroughly, with the help of spreadsheet software. One exercise introduces the concept of the chain-weight index by comparing it to Laspeyres, Paasche and ideal indexes with the use of utility analysis. The second exercise is a step-by-step process to calculate chain-weight index statistics.
Working Paper Number
0206
Recommended Citation
Cahill, Miles, "Teaching Chain-Weight Real GDP Measures" (2002). Economics Department Working Papers. Paper 112.
https://crossworks.holycross.edu/econ_working_papers/112
Published Version
This article was published as: Cahill, M. (2003). Teaching Chain-Weight Real GDP Measures. Journal of Economic Education, 34(3), pp. 224-234.
Fulltext URL for Link
http://www.indiana.edu/~econed/pdffiles/summer03/cahill.pdf