A New System of Index Numbers for National and International Purposes

Abstract

SUMMARY This paper describes and further develops the author's new system of index numbers of prices and quanta based on R. C. Geary's intuitive, simple and economically meaningful definitions of purchasing power parities and related average prices. Illustrations of the application of the author's new system for national and international purposes and comparisons with the corresponding traditional methods in current usage are made. Adaptation of the system for various purposes aimed at a more acceptable basis for a practical programme of national and international price and quantum temporal and spatial comparisons which satisfactorily answer almost all the known problems in this field are given. The paper also contains numerical illustrations and suggestions for further research.