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BPEA Article

Pharmaceutical Innovations and Market Dynamics: Tracking Effects on Price Indexes for Antidepressant Drugs

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THE CONSTRUCTION AND PUBLICATION of measures of price inflation are important tasks carried out by governmental statistical agencies. In the United States the Department of Labor's Bureau of Labor Statistics (BLS) publishes price indexes measured at the point of final consumer demand (the consumer price index, CPI) and at the initial transaction point, that is, prices received by producers from whomever makes the first purchase (the producer price index, PPI). These price measurement tasks are difficult ones, particularly because new goods embody scientific discoveries and technological progress; inherent difficulties exist in measuring the output of services that themselves combine goods and time, and dynamic structural and compositional changes occur in the underlying markets for production, distribution, and sale.


Iain M. Cockburn

University of British Columbia and National Bureau of Economic Research


Zvi Griliches

Harvard University and National Bureau of Economic Research

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