According to data released today by Statistics Greece ΕΛΣΤΑΤ, the industrial price index jumped 14.6% in April this year compared to the corresponding index in April 2020.
It is noted that with a corresponding comparison of indicators of 2020 with 2019, there was a decrease of 13.9%.
The general index in April 2021 compared to March 2021 showed an increase of 0.7%, compared with a decrease of 4.1%, which occurred with a corresponding comparison of the 2020 indices.
Average General Index for 12 months from May 2020 to April 2021, compared to the average general index for 12 months from May 2019 to April 2020, showed a decrease of 4.3%, compared with a decrease of 2.3% in the corresponding comparison of the previous period – for 12 months.
What is a price index and why you need to know it
“The highest dexterity is to know the true value of everything”, – the 17th century French writer François de La Rochefoucauld knew the value of the price, pardon the tautology. All of us more than once had to evaluate and compare the prices of various goods or products, as they say, “by eye”.
But this approach does not always give an objective result. In addition, what about a situation when you need to compare the prices of a large number of completely different things, and even for different periods of time?
The price index is provided by the science of econometrics and is specially created for specific purposes of evaluating and analyzing economic activity.
The concept of indexes. Index method
The index is a generalizing relative indicator that characterizes the change in the level of a social phenomenon over time, in comparison with the development program, plan, forecast, or its relationship in space. The most common comparative characteristic over time. In this case, the indices act as relative values of the dynamics.
Indices are a kind of relative value. They are used in the analysis of economic activity in order to characterize economic phenomena, consisting of elements that should not be summed up.
Technically, any index is an indicator, defined as the ratio of any two values. The latter are, in essence, certain states of a known feature. With the help of indices, comparisons of actual indicators with basic ones, that is, as a rule, with planned ones, and with indicators of previous periods are carried out.
The general price index shows how many times the cost of products has changed as a result of price changes, or how many percent was the increase (decrease) in the cost of products due to price changes. The value of the index, reduced by 100%, shows the percentage of the change in the cost of production as a result of price changes.
Who first calculated the consumer price index and how
How to calculate inflation? Analysis of the economy today is unthinkable without calculating price indices. With their help, we today determine how much the cost of life in our country has risen, at what percentage you need to put money in the bank so as not to lose. The formula for calculating the price index crystallized gradually, based on the works of various economists.
The main author is considered to be a native of the Huguenot family, Etienne Laspeyres, who taught at the main German universities of the 19th century, including Riga and Tartu.
General price index
In the conditions of modern economy and econometrics, an important place among the indices of quality indicators is given to the price index, which is an indicator of the dynamics of the price level. The consumer price index (CPI) is used to assess the dynamics of prices for goods of industrial and non-industrial consumption.
The CPI reflects the dynamics of final consumption prices, measures the overall change in the cost of a fixed set of consumer goods and services (“consumer basket”), and is also one of the main indicators characterizing the level of inflation. The CPI is used to adjust the minimum wage, calculate tax rates, etc.