Hello,
Typically, accounting for inflation uses a ratio that puts past prices into current prices for perspective. However, to measure the affect of inflation on commodity prices such that time (t) is instance specific, would it not be (COMMODITY PRICE) / (1 + (INFLATION RATE/100) for each instance? For example:
time series is monthly data:
Time (t) Gold Price (Inflation Adjusted)
Jan.01 284.32 276.8451801
Feb.01 299.86 290.5620155
Mar.01 286.39 275.9055877
If it's not clear, my goal is to measure the change in the actual CHANGE of dollar denominated commodities irrespective of the inflation over the corresponding time (t).
Does eviews have a plugin for what I'm trying to do?
Either way, I suppose this is a more common sense question, but if anyone can enlighten me with the correct approach I would be so grateful!
Inflation over time and Commodity pricing
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