Definition: Time reversal

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.
Source:
International Labour Organization (ILO), International Monetary Fund (IMF), Organisation for Economic Co-operation and Development (OECD), Statistical Office of the European Communities (Eurostat), United Nations (UNECE), The World Bank, Consumer Price Index Manual: Theory and Practice, Geneva, August 2004
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