Introduction of the 2005 base Corporate Goods Price Index (CGPI)
December 4, 2007
Research and Statistics Department
Bank of Japan
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The CGPI focuses on the prices of goods bought and sold by companies. The Bank of Japan (BOJ) compiles three Basic grouping indexes: Domestic Corporate Goods Price Index (DCGPI), Export Price Index (EPI) and Import Price Index (IPI). Each Index is calculated to aggregate affiliated sample prices using the weighted-average method. The sample prices are fixed in a basket of the base year, which reflects Japan's industry and trade structure at that time. Each index captures the change of costs and prices that all industries in Japan face under its input- and output-structure of the base year.
The industry and trade structure, however, changes continuously, reflecting activities of the corporate sector and the economic situation domestically as well as internationally, along with the appearance of new goods and the disappearance of exited goods in the market.
If the base year is fixed for a long time, indexes can not reflect the actual economic situation. Therefore, the BOJ revises the base year periodically ("base revision") and reviews the commodities*1 selected in the basket and the weights assigned respectively. The revision is conducted every five years with last digits of 0 or 5 in the same way as other economic indexes compiled by government agencies.
- *1commodities are aggregates of some surveyed prices of identical goods, and represent the smallest unit for which indexes of the CGPI are compiled and released.
As five years have passed since the previous base revision, the BOJ introduces the 2005 base CGPI and releases the figures of the new base index today.
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Research and Statistics Department, Bank of Japan
C.P.O. Box 203, Tokyo 100-8630, Japan
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