Economic Price and Volume Indexes in the Foreign Trade Analysis
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Abstract
The article studies one of the reasons of the deficit of payments current account balance. These are lower prices of imported goods in comparison to goods made in Lithuania and sold at the internal market. The article presents data of comparative analysis about prices of the goods made in this country and imported goods. Difference in prices between the goods made and sold at the internal market and imported goods causes import turnover increase, thus it is increasing the deficit of payments current account balance.
Detection the reasons of export and import changes, evaluation of the changes stipulated by changes of import and export volume level and the level it is stipulated by price change is important for analytical and forecasting purposes of national account systems and the payment balance. It’s important to establish the prices and volume change during some certain period of time. Some indexes are employed for analysis of the issues.
On the whole, the modern practice employs two different aggregate indexes, i.e. the indexes by Laspeyres and Paashe. Establishing of dependence between the indexes is important for practical calculations, especially while employing indexes of export-import of goods of different countries. The article presents dependencies between the volume and price indexes by Laspeyres and Paashe, their connection with the value of goods. Dependencies between indexes by Laspeyres and Paashe allow rationalize practical calculations and use available information fully.
Differences of volume and price indexes by Laspeyres and Paashe are illustrated by factual data on fish production import to Lithuania in 1997–2001. The calculations show, that the value of volume and price indexes by Laspeyres is larger than analogous values of the indexes by Paashe. That is concomitant with economic matter of indexes. Under the stable economy, employing the volume and price indexes by Laspeyres is more expedient for foreign trade analysis.
Detection the reasons of export and import changes, evaluation of the changes stipulated by changes of import and export volume level and the level it is stipulated by price change is important for analytical and forecasting purposes of national account systems and the payment balance. It’s important to establish the prices and volume change during some certain period of time. Some indexes are employed for analysis of the issues.
On the whole, the modern practice employs two different aggregate indexes, i.e. the indexes by Laspeyres and Paashe. Establishing of dependence between the indexes is important for practical calculations, especially while employing indexes of export-import of goods of different countries. The article presents dependencies between the volume and price indexes by Laspeyres and Paashe, their connection with the value of goods. Dependencies between indexes by Laspeyres and Paashe allow rationalize practical calculations and use available information fully.
Differences of volume and price indexes by Laspeyres and Paashe are illustrated by factual data on fish production import to Lithuania in 1997–2001. The calculations show, that the value of volume and price indexes by Laspeyres is larger than analogous values of the indexes by Paashe. That is concomitant with economic matter of indexes. Under the stable economy, employing the volume and price indexes by Laspeyres is more expedient for foreign trade analysis.
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Articles
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Authors retain copyright of their work, with first publication rights granted to the Association for Learning Technology.
Please see Copyright and Licence Agreement for further details.
