Relating commodity prices to underlying inflation: the role of expectations
AbstractTemporary supply factors may boost some commodity prices—a drought in the Midwest can jolt food costs, or a conflict in the Middle East might propel oil higher. These, in turn, can increase the overall consumer price index (CPI) and the headline inflation rate. ; Because central bank anti-inflation measures sometimes take a long time to affect prices, policymakers don’t necessarily react to short-term fluctuations in headline inflation (an overall rate that’s not seasonally adjusted). In fact, the mandate of many inflation-targeting central banks is to aim to keep headline inflation at a certain target or within a certain range “over the medium term,” widely recognized as a few years. Thus, even a strict inflation-targeting central bank doesn’t aim to contain short-run headline inflation fluctuations.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoArticle provided by Federal Reserve Bank of Dallas in its journal Economic Letter.
Volume (Year): 6 (2011)
Issue (Month): dec ()
You can help add them by filling out this form.
reading list or among the top items on IDEAS.Access and download statisticsgeneral information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Delia Rodriguez).
If references are entirely missing, you can add them using this form.