|[Technology]||[<Normal page] [PEREZGONZALEZ Jose D (2013). Referential EUR based on HICP (2013e)3. Knowledge (ISSN 2324-1624), 2014, pages 8-9.] [DOI]|
Referential euro (rEUR, r€) is the real value of the euro (EUR, €) back in 2010, which is used here as referential currency for better understanding the value of money overtime. The referential euro is based on the average annual HICP for the euro area, changing composition (European Central Bank, 20131). It is calculated by updating the nominal value of the euro with the appropriate multiplier. The formula for transforming EUR into rEUR follows, while Table 1 provides the correct multiplier (an inflator/deflator multiplier) for the formula.
|rEUR = nominal EUR + (nominal EUR * multiplier)|
|Table 1. HICP for Europe and rEUR multiplier|
|Year||HICP A.Avg||Base 2010||multiplier|
|(*Assuming a 3% accumulated inflation rate.)|
Want to know more?
- A handy website to learn about different inflation indexes and calculate the value of money according to those indexes.
- WikiofScience - Referential currency
- You will find a full explanation for the concept of referential currency (thus, for referential euros) on this page.
Jose D PEREZGONZALEZ (2014). Massey University, Turitea Campus, Private Bag 11-222, Palmerston North 4442, New Zealand. (JDPerezgonzalez).