In this article, the authors have proposed to briefly present theoretically how macroeconomic aggregates can be expressed in real expression. It also shows that price indices are the basis for deflation. Deflation is the process by which an aggregate is converted into monetary expression, from current prices into real prices. In the simplest way, transformation is an arithmetic operation of dividing the nominal aggregate into a price index corresponding to the analyzed period. The simplicity of expression has the complexity of how aggregates turn into real expression indicators. Actual expression indicators ensure the possibility of comparability at the level of a state in time when data are brought to the same common denominator by reference to the price index of a base period in that comparison. In other words, the central problem of deflation refers to the construction of a price index to ensure the transformation of an aggregate expressed in nominal prices, aggregated in real prices, in order to determine the level and especially the way in which that indicator was recalculated. In other words, mathematically we express the computational relations so as to arrive at aggregates expressed in real prices or in comparable real values. The deflation of a nominal aggregate with a physical structure implies the transformation of the aggregate primarily into its structural elements so as to ensure comparability in the study both globally and in the structure of macroeconomic output indicators (GDP) elements. We know that gross domestic product can be analyzed structurally according to several criteria from the point of view of sources used, use of gross domestic product, ownership forms, investment/consumption ratio, or wider structure of sectors Contributed to the achievement of the indicators. Therefore, before ensuring any such comparability, there is the question of expressing aggregates in prices or realistically comparable values.
1. Ang, A., Bekaert, G. & Wei, M. (2008). The Term Structure of Real Rates and Expected Inflation. Journal of Finance, 63, 797-849.
2. Anghel, M. G. (2015). Analiz? financiar-monetar?, Editura Economic?, Bucure?ti.
3. Anghel, M. G. (2015). The Inflation (Consumer Price) Evolution, Romanian Statistical Review Supplement, 1, 128-132.
4. Anghelache, C. & Anghel, M. G. (2016). Bazele statisticii economice. Concepte teoretice ?i studii de caz, Editura Economic?, Bucure?ti.
5. Anghelache, C., Gheorghe, M. & Voineagu, V. (2013). Metode ?i modele de m?surare ?i analiz? a infla?iei, Editura Economic?, Bucure?ti.
6. Anghelache, C., Gheorghe, M., Manole, A. et al. (2012). Main Aspects regarding the Consumer Price Index, Revista Român? de Statistic? Supliment, 1, 39-44.
7. Anghelache, C., Gheorghe, M., Manole, A. & Fetcu, A. E. (2011). The Consumer Price Index among Major Price Indices, Proceedings of the International Symposium „Economic-Financial Crisis and the Emergency of the Reform”, Editura Artifex, Bucure?ti, 152-159.
8. Anghelache, C. (2008). Tratat de statistic? teoretic? ?i economic?, Editura Economic?, Bucure?ti.
9. Anghelache C., Isaic-Maniu Al., Mitru? C. & Voineagu V. (2007). Sistemul conturilor na?ionale, Edi?ia a II-a, Editura Economic?, Bucure?ti.
10. Anghelache, C., Manole, A. et al. (2007). Analiz? macroeconomic?, Editura Economic?, Bucure?ti.
11. Anghelache, C. (2004). Sistemul European al Conturilor – note de curs, Editura Artifex, Bucure?ti.
12. Atkeson, A., & Kehoe, P. J. (2004). Deflation and Depression: Is there an Empirical Link?, American Economic Review, Papers and Proceedings 94, 99-103.
13. Biji, M., Lilea, E., Ro?ca, E., & V?tui, M. (2010). Statistica pentru economi?ti, Editura Economic?, Bucure?ti.
14. Bordo, M, & Filardo, A. (2005). Deflation in a Historical Perspective, Working paper No. 186, Bank for International Settlements.
15. Bansal, R. & Shaliastovich, I. (2013). A Long-Run Risks Explanation of Predictability Puzzles in Bond and Currency Markets. Review of Financial Studies, 26, 1-33.
16. Buraschi, A. & Jiltsov, A. (2007). Habit Formation and Macroeconomic Models of the Term Structure of Interest Rates. Journal of Finance, 62, 3009-3063.
17. Campbell, J. Y., Shiller, R. J. & Viceira, L. M. (2009). Understanding Ináation-Indexed Bond Markets, Brookings Papers on Economic Activity, 79- 120, Spring 2009.
18. Capanu, I. &Anghelache, C. (2000). Indicatorii economici pentru managementul micro ?i macroeconomic, Editura Economic?, Bucure?ti.
19. Calvo, G. (2016). From chronic inflation to chronic deflation: Focusing on expectations and liquidity disarray since WWII, NBER Working Paper No. 22535.
20. Campbell, J. Y., Sunderam, A. & Viceira, L. M. (2013). Inflation Risk or Deflation Hedges? The Changing Risks of Nominal Bonds, Working paper, Harvard University.
21. Cochrane, J. H. (2011). Determinacy and Identification with Taylor Rules. Journal of Political Economy, 119, 565-615.
22. Crawford, V. P., Costa-Gomes, M. A. & Iriberri, N. (2013). Structural Models of Nonequilibrium Strategic Thinking: Theory, Evidence and Applications. Journal of Economic Literature, 51, 5-62.
23. Goodwin, N. R. (2008). Macroeconomics for the Twenty-First Century, Tufts University, series GDAE Working Papers no. 03-02.
24. Guidolin, M. & Timmermann, A. (2006). An Econometric Model of Nonlinear Dynamics in the Joint Distribution of Stock and Bond Returns. Journal of Applied Econometrics, 21, 1-22.
25. Kilian, L. & Manganelli, S. (2007). Quantifying the Risk of Deflation. Journal of Money, Credit, and Banking, 39, 561-590.
26. Müller, U. K. (2011). Efficient Tests under a Weak Convergence Assumption. Econometrica, 79, 395-435.
ANGHELACHE, C., POPOVICI, M., SOLOMON, A. – G., & STANCIU, E. (2017). Aggregates in Real Expression and Price Indices by Deflation. International Journal of Academic Research in Business and Social Sciences, 7(6), 979-985.
Copyright: © 2017 The Author(s)
Published by Human Resource Management Academic Research Society (www.hrmars.com)
This article is published under the Creative Commons Attribution (CC BY 4.0) license. Anyone may reproduce, distribute, translate and create derivative works of this article (for both commercial and non-commercial purposes), subject to full attribution to the original publication and authors. The full terms of this license may be seen at: http://creativecommons.org/licences/by/4.0/legalcode
