Journal of Economics and Development Studies

An Empirical Analysis of Single-Deflation Bias using JSNA data for 1955–2017 -Based on Consideration from an Input-Output Framework
Jie Li

Abstract
In this study, using the input-output framework of an open economy, I consider how price changes among domestic products and the price change between domestic products and imported goods affect the bias caused by single deflation. Thus, I find that the bias is negative when the price increase of intermediate products is higher than that of the final products, and positive when it is lower. Additionally, the bias is negative when the price rise of imported intermediate products is higher than that for domestic products, and positive when it is lower. I then examine this conclusion using numerical examples from open economic input-output tables. Furthermore, using System of National Accounts of Japan/Japanese SNA (JSNA) data (period: 1955–2017), I estimate the real added-value by applying a single-deflation method and calculate the bias in the official data that use the double-deflation method. I then compare the results with the price index of imported mineral fuels, which represents Japan’s imported intermediate goods. In the case of Japan, the bias direction is confirmed to be closely related to the price fluctuation of imported intermediate products.

Full Text: PDF     DOI: 10.15640/jeds.v7n2a2