| Abstract: | This short paper focusses on an apparent conflict between two results from different approaches to the problem of finding multilateral index numbers. The impossibility theorem of Van Veelen (2002 ) is an axiomatic result that rules out the existence of a multilateral index that satisfies four modest requirements. This also implies that no bilateral index can consistently be generalized to a multilateral setting. Adopting a revealed preference approach, Dowrick and Quiggin (1997 ) however construct a multilateral extention of Fisher's ideal index, which preserves a range of desirable properties. This note shows what it is that drives the divergence between those two results. It also gives implications for practical use of results from either approach. |
