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Finance and Economics Discussion Series
The Finance and Economics Discussion Series logo links to FEDS home page A Guide to the Use of Chain Aggregated NIPA Data
Karl Whelan
2000-35


Abstract: In 1996, the U.S. Department of Commerce began using a new method to construct all aggregate ``real'' series in the National Income and Product Accounts (NIPA). This method employs the so-called ``ideal chain index'' pioneered by Irving Fisher. The new methodology has some extremely important implications that are unfamiliar to many practicing empirical economists; as a result, mistaken calculations with NIPA data have become very common. This paper explains the motivation for the switch to chain aggregation and then illustrates the usage of chain-aggregated data with three topical examples, each relating to a different aspect of how information technologies are changing the economy.

Keywords: NIPA Data, chain aggregation, information technologies

Full paper (144 KB PDF)


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Last update: August 11, 2000