Price Indices.

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Why purchasing power of goods range, but never disappears?Where the employer knows how to raise wages to the employee?This and much more - in the article below.

What price indices

In everyday life, we are not always able to notice how prices change on the output as the first necessity, and that without which we can well do without.Such normal dynamics of a small amplitude deviation and a price indexes (hereinafter - IC).This figure is quite popular to use in many areas of economic and social activities, and not just because it has a series of historical prerequisites of its formation and employment should position in society.For example, highlight some of the features of the IC:

  • it causes genuine interest not only in the press, but also in ordinary households;
  • the successful long-term use of the confidence he has earned a solid position in society;
  • over his drawing is usually employed professionals in a particular field, so errors in the quantitative characteristics are minimal.

Formation price index

Each index price level pursues the purpose of use, so when you create them is taken into account a number of factors, which are determined depending on the purpose for which it will serve.Initially, these figures were created in the eighteenth century.

At the time when their aim was the formation of labor compensation of employees in as their piecework wage to the inflation rates of consumer goods.Today, this phenomenon is called indexing.

In today's world final formed IC has the following features:

  • frequency of the publication (monthly or quarterly);
  • unquestioning reliability of (manifested in the fact that the published figures are not checked, and no one has translated);
  • full transparency and accessibility (information is placed in publications of mass consumption, and everyone has the opportunity to see it).

often in the consumer price indices replace the world inflation, causing constant conflict between the two.This is due to the fact that the first is aimed at sector-specific data and does not always cover these or other consumer goods, the most interesting for households, and vice versa.

Scope

their use in modern economic system, there are several key tasks, the solution of which the price indices used.

Firstly, during the qualitative analysis of IC used for factor analysis.Thus, analysts can identify the dynamics of changes in sequential order.The output is a number of indicators that differ from each other - they are collectively called the system and indexes.

Secondly, from the data we can determine the degree of influence of one or another element in the total cost of production.In other words - it becomes clear what concrete form the most significant for the regulation of pricing policy.

Third, ultimately, the data can be compared with the incommensurable values.This means that on the basis of factor analysis as a whole is likely to predict the pace and direction of the dynamics of inflationary processes in the country.

Territorial predisposition IC

not always commensurate price indices within states, so often in the modern practice of economic analysis used by the territorial comparison.So, it takes certain category of goods, calculated the dynamics of fluctuations in the cost of a few countries and on the basis of these endpoints are compared in their totality.

Often such analyzes are carried out by companies, trade practices in several countries.Because for them it is essential to have an idea about the level of revenue and net income in the various territorial market segments.These indicators directly affect the level of sales.

Price Index: the formula for calculating

is difficult to have any understanding of the factors and their importance, if not understand how they are calculated, and which components carry a certain degree of influence.Let's try an example: we need to understand in which direction has the demand for the goods And in the last month, so the first thing we have to calculate indicators such as the price index.The formula in its original form would look like this:

  • commodity price index A = Product price And in June 2015: A price of goods in May 2015.

not difficult to guess: if the resulting index is greater than one, then, most likely, the demand for the products in question to some extent fallen.

How to regulate prices

Few ordinary consumers in the face of housewives thought about why prices never grow evenly.Nevertheless, the state carried out a policy aimed at regulating the dynamics of this index, the performance of which are actively used rendering index prices.

most active such government activity in Western countries.It has similar disparity in direct installation cost of production, which means a certain freezing of this magnitude.Or, perhaps, the indirect influence of the state on pricing in the country.In this case, reduce the tax duties, customs duties and other obligatory payments to the treasury.

But do not forget that regulate the behavior of the monopolist is much more difficult than enterprises operating in normal competition.Therefore, in such cases, the disparity is determined in accordance with the cost spent on the release of a product.This rate is constantly fluctuating depending on inflationary factors.

Indexes in business

It should be understood that the index price changes - an indicator useful not only for the state to keep a finger on the pulse of the producers, but also the entrepreneurs themselves often used it to analyze their own production activities.

At the current level of inflation is very difficult to keep their own businesses afloat, if not follow the nominal value of working capital.After all, if we sell the goods, starting from the old value of inventories, then, having bought another batch already at the new prices, we hardly left with any profit.

In this case, the value of the finished product is regulated either by the current inflation rate based on the GNP deflator, or the value is calculated by adjusting the components of working capital reserves, the nominal value of which varies according to the individual IC for each of them.

indices and income

most palpable in its inflation even the slightest manifestation for those vulnerable people who receive benefits from the systematic state - pensioners, beneficiaries and others.For them, the index of price growth - is, first of all, reduced ability to provide for themselves.

approach the government of each country is different in this case.Thus, countries with a high level of development of capitalism calculate individual coefficients are aimed at products most in demand from seniors and the disabled, and further taking into account the findings raise the level of benefits.

on the territory of the former Soviet Union as the minimum pension is calculated in accordance with the level of the subsistence minimum working person, without regard to age and social features in the needs of older and unprotected layers of the population.

Indexing in Russia

index of current prices - the question is very painful and, therefore, a complex on the territory of our state.Over the past few decades, such a situation occurred, when the rate of inflation in the transition to a market economy in the country were so great that the level of income of the population did not meet even the minimal consumer basket.

Such situations detrimental impact not only on households but also in the monetary system of the state as a whole.Since the level of confidence in the national currency has been steadily decreasing, which entails removal from the cash market it as such, and the spread of foreign banknotes.That, in turn, leads to the rapid development of the shadow economy.

is therefore extremely important to monitor not only the level of indexation of the cost of goods, but also for the bar income, so as not to undermine the credibility of both government agencies and the value of the currency in general.