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An investigation into the coherence of deflation methods in the national accounts
This article presents the methodology of the Constant Price Input-Output system together with some of the results.
In January 2002, ONS published an article in Economic Trends reporting on current and planned work on developing Constant Price Input-Output (KPIO) Supply-Use Balances. It described how the re-launched KPIO project would use deflators that were transparently linked to those used in the existing National Accounts and so allow us to examine the coherence of those deflators.
This article presents the methodology of the KPIO system, which relies on the existing Supply and Use framework in current prices. It describes how each section of the Supply and Use table is completed in the prices of a constant base year (1995) using estimates derived from and fully consistent with the existing constant price estimates in the National Accounts. Results from the unbalanced KPIO system have been calculated for 1995-1999.
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