to create an index of averaged price relatives. His work, published anonymously in Chronicon Preciosum, showed the value of five pounds had shifted significantly over 260 years.

Basic formula

Price indices measure relative price changes using price () and quantity () data for a set of goods or services (). The total market value in period is: : where is the price and the quantity of item in period . If quantities remain constant across two periods (), the price index simplifies to:

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