Aggregating Sub-annual Current Price Value of Changes in Inventories to Annual Totals Under Condition of Inflation - An Inherent Dilemma - ARCHIVED

Under any degree of inflation, high or low, the values of changes in inventories (VPC) is generally different when it is calculated at the quarterly interval and the four quarters are aggregated into a year compared with its calculation done at the yearly interval. It is argued in this paper that it is an inherent problem as one of the basic axioms of annual accounts is violated, namely, the assumption of price homogeneity over an accounting period.