CHAPTER 8: Fixed Base Versus Chained Indexes 1. These range from more … If anyone can be called the father of modern analytical and scientific economics, it is Paul A Samuelson now sadly … 102 Citations; 73 Downloads; Log in to check access. Read more about Subramanian Swamy: Samuelson - A genius who was my guru on Business Standard. He has jointly authored papers with another Nobel Laureate Paul A Samuelson on theory of index Numbers. The economic boxes: a rejoinder. © 2020 Springer Nature Switzerland AG. The paper was published in 1974. This is a preview of subscription content. Turnpike refutation of the golden rule in the welfare-maximizing many year plan. This is evident especially after the Arnab Goswami-Narendra Modi interview, where the PM ticked off Swamy saying RBI governor, Raghuram Rajan is no less patriotic than anyone and no one isn’t above the system. And here’s the twist that gives clue to why Swamy is openly beginning his fight against his own camp starts. Harping on the invaluable and precocious nature of the Samuelson-Swamy Theory of Index Numbers, Mr. Swamy also makes it known in no uncertain terms that the economic reforms and liberalization which were promulgated by the Narasimha Rao Government originally stemmed from a reform paper conceived by him when he was a Cabinet Minister in the Chandrashekar Government. Swamy, an economist and academic himself, is known internationally. He has taught in Harvard for seven years. Arnord, K.J. The literature on index numbers is so vast that we can cover only a small fraction of it in this chapter. and Swamy, S. (1974) Invariant Economic Index Numbers and Canonical Duality Survey and Synthesis. Only Swamy knows what exactly he meant by this and how this is relevant to his current political situation. Theory and Statistical Index Numbers Richard G. Anderson, Barry E. Jones, and Travis D. Nesmith T he aggregate quantities of monetary assets held by consumers, firms, and other economic decisionmakers play important roles in macroeconomics. Warn PM Modi that the finance ministry is blissfully unaware of the problem and his counsel should be sought immediately? By comparing the index numbers of these magnitudes for different periods, the government can know the present trend of economic activity and accordingly adopt price policy, foreign trade policy and general economic policies. Introduction to Index Number class 11 Notes Economics. For example, if a commodity costs twice as much in 1970 as it did in 1960, its index number would be 200 relative to 1960. Pearce, I.F. Duality and the structure of utility preferences. The quantity theory of money asserts that the value of money, which in itself is a function of the general level of prices, varies with its supply. It is, arguably, the oldest branch of mathematics. This is one of over 2,200 courses on OCW. “Cannot make sense of this!,” said an economist with a leading research house. In K.J. A catenary turnpike theorem involving consumption and the golden rule. Is BJP leader, Subramanian Swamy training his guns beyond RBI governor, Raghuram Rajan, and his nemesis, Arun Jaitley? In F.A. Samuelson, P.A. Sato, R. (1977b). The theory of index numbers has a long and distinguished history. Zellner, A., & Revanker, N.S. RECENT DEVELOPMENTS IN INDEX NUMBER THEORY There has been a recent resurgence of interest in index number theory following a number of important articles and books which appeared in the early 1970s: for example, Griliches ( 197 11, Pollak 197 11, Christensen, Jorgenson and Lau (1 97 11, Fisher and Shell ( 19721, and Samuelson and Swamy ( 1974). Undoubtedly, Swamy is a trojan horse implanted by the RSS in the Modi OS. Clapham, J.H. Corrected formulation of direct and indirect additivity. Is Swamy digging his own grave in BJP? On evaluation of social income in a dynamic economy: variations on the Samuelsonian theme. I first met Paul Samuelson in 1962, as a student at MIT. On the separable class of non-homothetic CES functions. An index starts in a given year, the base year, at an index number of 100. Instead of choosing the basket of period 0 or 1 (or an average of these two baskets), it is possible to choose a basket that pertains to an entirely different period, say, period b. Index Numbers in Theory and Practice. https://doi.org/10.1007/978-4-431-54430-2_6, Advances in Japanese Business and Economics. Recommended articles Citing articles (0) References Notes on index numbers. Houthakker, H.S. Intertemporal distribution and ‘optimal’ aggregate economic growth. Cite as. Academic:- His paper ‘Notes on Fractile Graphical Analysis’ was published in Econometrica, 1963 . Scholars like Edgeworth and Bowley were quick to recognize that the difficulties in quantifying fluctuations in purchasing power of money arose from the absence of such proportionality (Allen 1975, p. 2). Introduction In this chapter1, the merits of using the chain system for constructing price indexes in the time series context versus using the fixed base system are discussed. Estimation of self-dual demand functions: an international comaprison. e24 16. Weitzman, M.L. Joshi, Subramanian Swamy prepared and presented a Swadeshi Plan. (1981). (1961). This service is more advanced with JavaScript available, Symmetry and Economic Invariance Firstpost - All Rights Reserved. Index numbers are relative measurement of group of data. In M. Fuss, & D. Mc-Fadden (Eds.). As women post their #nobraclub selfies on Instagram, the social media platform has also become the site where the corset is enjoying something of a Renaissance. (1973). 8. Samuelson, P.A., & Solow, R.M. pp 73-85 | — Subramanian Swamy (@Swamy39) July 1, 2016. Symbolically, the circular test may be written as P01 .P12 . Invariance axioms and economic indexes. (1957). Intriligator (Eds.). Clapham, J.H. Basic contributions in the so-called "functional-approach" to 466 Constant--Market--Shares Analysis index number theoryS, due to Samuelson and Swamy (1974), Diewert (1976j978), and Lau (1979) have clarified that certain functional forms for the aggregator function can be associated with certain in- dex number formulas. Marshall’s theories of competitive price. The monograph vociferously demanded that socialism be sacrificed for a competitive market economic system, so India can grow at 10 per cent per year, achieve self-reliance, full employment and produce nuclear weaponry. If the change in the money supply is followed by a proportionate change in all prices, then the measurement of the changes in the price level will not constitute any problem. Tullberg (Ed.). 132. He wondered, whether Arnab’s continuous chanting of “Muruga, Muruga” (which he later clarified as Subramanian) in his show is because Arnab is bitten by “a mad unelectable dog”. Traditional index number theory decomposes a value ratio into the product of a price index times a quantity index. Sato, R. (1990). 33, No. Index numbersEconomists frequently use index numbers when making comparisons over time. Historically, pandemics have forced humans to do things differently from the past and have created momentum for change. Sato, R. (1985). It is an extension of the time reversal test. Everyone expected Swamy to counter Modi’s criticism, just like he did against Jaitley, through his 2.8 million strong twitter empire but the giant slayer just went sober. (1969). MIT OpenCourseWare is a free & open publication of material from thousands of MIT courses, covering the entire MIT curriculum.. No enrollment or registration. Robertson, D.H. (1924). Annual surveys of general economic theory: the problem of index numbers. Those empty economic boxes. Integer solutions to Pythagoras’s equation a 2+b = c2 have been found, systematically listed with all the arithmetic carried out in base 60, on ancient Babylonian clay tablets. 1010. (1922b). An index number of 102 means a 2% rise from Generalized production functions. American Economic Review, 1974, vol. Harping on the invaluable and precocious nature of the Samuelson-Swamy Theory of Index Numbers, Mr. Swamy also makes it known in no uncertain terms that the economic reforms and liberalization which were promulgated by the Narasimha Rao Government originally stemmed from a reform paper conceived by him when he was a Cabinet Minister in the Chandrashekar Government. Samuelson and S. Swamy (1974, pp. A mathematical theory of saving. Updated Date: The chain system2 measures the change in prices going from one period to a subsequent … Swamy relatively tweeted peacefully in the following hours with some general advices to his followers, his “new problem” of publicity relentlessly seeking him and some random tweets on Rajan’s degree. Samuelson, P.A. Invariant Economic Index Numbers and Canonical Duality: Survey and Synthesis. Dr.Swamy has a Masters degree in Statistics from the Indian Statistical Institute, Calcutta, and a Bachelor Honours degree in Mathematics from the University of Delhi. 567-568) Introduction The index-number problem is typically a problem of aggregation of changes in heterogeneous elements. More information on index number theory. However, other fixed basket approaches are also possible. Samuelson, P.A. Lau, L.J. The invariance principle and income-wealth conservation laws. (1982). An index number is an economic data figure reflecting price or quantity compared with a standard or base value. Hanoch, G. (1975). Popular gadgets including laptop, tablet and mobile specifications, features, prices, comparison. Hicks, J.R. (1969). Diewert, W.E. Koopmans, T.C. A note on self-dual preferences. Subramanian Swamy also claimed that India’s growth rate is much lower than what is being presented. Index numbers measure changes in such magnitudes as prices, incomes, wages, production, employment, products, exports, imports, etc. Formal training in index numbers is available through the GSS Learning Academy. Instead, he has expressed his solidarity to Modi through his tweets even after the PM criticised him, saying, “Come hell or high water, I stand by Modi." (1967). Welcome! Models of optimal endogenous technical progress, scale effect, and duality of production functions, Discussion Paper, Department of Economics, Brown University, Providence, RI. Methods of constructing index numbers: There are two methods to construct index numbers: Price relative and aggregate methods (Srivastava, 1989). Johnson, W.E. index, i.e. Houthakker, H.S. The point here is not really whether Samuelson-Swamy theory, when applied, topples the GDP numbers or not. Pollak, R.A. (1971). Roman Numerals; Other Pages. Nakamura (Editors) c 1993 Elsevier Science Publishers B.V. All rights reserved. On 29 June, Swamy shot a tweet, quoting junior finance minister Jayanta Sinha, that bank NPAs have touched Rs 8 lakh crore and scolded Arnab for denying that fact on television. 1 The strength of the index number approach (whether EKS, Geary-Khamis or the method of Caves et al., 1982) is that it allows all available data to be used, i.e. So Krishna advised: Sukh Dukhe....”. If I apply Samuelson-Swamy Theory of Index Numbers to India’s GDP calculation or RBI interests rates, media will scream anti party activity! Rawls’ principle of just saving. Completed his PhD in only two and half years from Harvard (was only 24 at that time). Swamy had co-authored a paper on the Theory of Index Numbers, with Paul Samuelson, the latter being the first American to win a Nobel Prize. Kemp, M.C., & Long, N.V. (1982). (1984). After the RBI financial stability report came out, quoting financial dailies, Swamy said, his prediction about a banking/financial crisis is imminent. (1969). Cardinal, Ordinal and Nominal Numbers Cardinal / Ordinal Chart; π, e (Euler's Number), Phi (The Golden Ratio) Other Number Systems Binary. (1987). Empty economic boxes: a reply. (1958). Lau, L.J. Swamy versus Modi: If I apply Samuelson-Swamy Theory of Index Numbers to India's GDP calculation or RBI interests rates, media will scream anti party activity, he said. Born in Mylapore, Chennai on September 15, 1939, Dr. Swamy holds a Ph.D. in Economics from Harvard University, where he also taught for ten years, and has published famous joint papers on the Theory of Index Numbers with Nobel Laureate Paul A. Samuelson. Of empty economic boxes. P.A. In A. Ingham, & A.M. Ulph (Eds.). Mathematically, it consists in reducing the relative change of the elements of a vector into changes in one single numerical value, a scalar. Lutz, & D.C. Hague (Eds.). 2. Addicitive preferences. During emergency (1975–77) arrest warrants were issued against many ministers including Swamy and he was able to … For example, if a commodity costs twice as much in 1970 as it did in 1960, its index number would be 200 relative to 1960. (1966). If the change in the money supply is followed by a proportionate change in all prices, then the measurement of the changes in the price level will not constitute any problem. ECON 5415 Index Number Theory Reading List September 19, 2019 Contents 1 General References1 2 Introduction and Historical Notes2 3 Review of Mathematical Tools and Economic Theory2 ... Swamy,Subramanian (1965) \Consistency of Fisher’s Test," Econometrica, 33(3), 619{623. absolutely agree to (5) I absolutely disagree (Number 3 was neither agree nor disagree). In R. Sato, & T. Negishi (Eds. Invariant Economic Index Numbers and Canonical Duality: Survey and Synthesis By P. A. SAMUELSON AND S. SWAMY* Index numbers of prices and quantities, an invention of the last century, are impor-tant for macro-economic description and for sliding-scale wage and other contracts. Per peer-reviewed document published in Econometrica, 1963 having worked with Nobel Laureate Paul a Samuelson theory. Of numbers: a Survey increases push the figure below 100 financial dailies, also. ), Sato, R. ( 1974 ) to why Swamy is the author of several books, research and... 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