Reflections on the activity index and related indicators

摘要

We point out some theoretical problems in the construction of the activity index and related indicators. Concretely, if the activity index is larger than one then it is, at least theoretically, possible to decrease its value by increasing the activity in that field. Although for some practical applications these problems do not seem to have serious consequences our investigation adds to the list of problematic indicators. As the problems we point out are due to the mathematical structure of this indicator our analysis also applies to all indicators formed in the same way, such as the revealed comparative advantage index or Balassa index.