ABSTRACT
The price index is associated with a narrow concept of the cost of living problem, but it is most familiar and important, for both theory and practice. With its long history and large literature, and now quite elaborate theory, a sketch can give the essentials more readily than an extended account. An outline of the main ideas is described in this chapter. History is touched only where points are encountered directly, and theorems are brought in discursively and without proof. Other chapters deal with the same matters in more detail. The ground has been trodden so often that what one makes of it might be a personal accident. William Fleetwood, Irving Fisher, and S. S. Byushgens stand out from the past in this account. Writings of J. R. Hicks, R. G. D.Allen, and Paul Samuelson form a background, while interest was evoked from J. R. N. Stone, and from Robin Marris who drew attention to the theorem of Byushgens that has influenced the other theorems. The ‘true index’ is an early vague term that has later acquired the meaning dealt with here.
