Definition: Time reversal

Category: Consumer Price Index

An index number property such that, if jIk denotes a particular kind of price index formula that measures the change from period j to period k, then jIk:1/kIj where kIj measures the change from period k to period j. When an index has this property, the change is the same whether it is measured forwards from the first to the second period or backwards from the second to the first period. An index may be required to satisfy the time reversal test under the axiomatic approach. http://www.ilo.org/public/english/bureau/stat/guides/cpi/index.htm