current-weighted index

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A weighted average of prices or quantities, where the weights used are proportional to the quantities or prices of the most recent period. Where pij and qij are the prices and quantities of goods i = 1, 2,…, N in period j, 0 labels the base period, and t the latest period, the current-weighted, or Paasche, price index is given by

Pc = Σipitqitipi0qit

and the current-weighted, or Paasche, quantity index is given by

Qc = Σipitqitipitqi0.

Subjects: Economics.

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