Google is using its vast database of web shopping data to construct the ‘Google Price Index’ – a daily measure of inflation that could one day provide an alternative to official statistics. The work by Google’s chief economist, Hal Varian, highlights how economic data can be gathered far more rapidly using online sources.This is similar to an idea I proposed during a SWEET meeting last semester about using data from Amazon or other popular internet retailers to develop a real time online price index. I remember the general consensus was that it was a stupid idea. Maybe my next stupid idea will be taken a little more seriously...
Also, pay close attention to this bit:
Mr Varian said that the GPI shows a “very clear deflationary trend” for web-traded goods in the US since Christmas.
Interesting article
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