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Fisher's Instrumental Approach to Index Numbers

Fisher's Instrumental Approach to Index Numbers Correspondence may be addressed to Marcel Boumans, Department of Economics, University of Amsterdam, Roetersstraat 11, 1018 WB Amsterdam, The Netherlands; e-mail: Boumans@fee.uva.nl. I am grateful to Mary Morgan, Judy Klein, Ted Gayer, Roy Weintraub, Harro Maas, Mark Blaug, and an anonymous referee for their constructive comments. Marcel Boumans tests on grounds of their inconsistency and the seeming arbitrariness of the choice of tests. That debate started with Ragnar Frisch in 1930, but the Axiomatic Index Theory only got its current name and shape—based on functional equation analysis—from Wolfgang Eichhorn in 1973. In Axiomatic Index Theory, the tests are considered as requirements on the functional form of the index number from which the index formula can be derived. If these requirements are inconsistent, no formula can be constructed. So although Fisher’s work is seen as the forerunner of the Axiomatic Index Theory, his system of tests was much criticized because of its apparent internal inconsistency. The aim of this essay is to show that evaluating Fisher’s work from an axiomatic perspective leads to a misconception of his empirically inclined approach to the assessment of index numbers. For a better understanding of his work on index numbers, his background in http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png History of Political Economy Duke University Press

Fisher's Instrumental Approach to Index Numbers

History of Political Economy , Volume 33 (Suppl 1) – Jan 1, 2001

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Publisher
Duke University Press
Copyright
Copyright 2001 by Duke University Press
ISSN
0018-2702
eISSN
1527-1919
DOI
10.1215/00182702-33-Suppl_1-313
Publisher site
See Article on Publisher Site

Abstract

Correspondence may be addressed to Marcel Boumans, Department of Economics, University of Amsterdam, Roetersstraat 11, 1018 WB Amsterdam, The Netherlands; e-mail: Boumans@fee.uva.nl. I am grateful to Mary Morgan, Judy Klein, Ted Gayer, Roy Weintraub, Harro Maas, Mark Blaug, and an anonymous referee for their constructive comments. Marcel Boumans tests on grounds of their inconsistency and the seeming arbitrariness of the choice of tests. That debate started with Ragnar Frisch in 1930, but the Axiomatic Index Theory only got its current name and shape—based on functional equation analysis—from Wolfgang Eichhorn in 1973. In Axiomatic Index Theory, the tests are considered as requirements on the functional form of the index number from which the index formula can be derived. If these requirements are inconsistent, no formula can be constructed. So although Fisher’s work is seen as the forerunner of the Axiomatic Index Theory, his system of tests was much criticized because of its apparent internal inconsistency. The aim of this essay is to show that evaluating Fisher’s work from an axiomatic perspective leads to a misconception of his empirically inclined approach to the assessment of index numbers. For a better understanding of his work on index numbers, his background in

Journal

History of Political EconomyDuke University Press

Published: Jan 1, 2001

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