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Alternative Measures of Core Inflation in Romania

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Author Info

  • Pelinescu, Elena

    ()
    (Institute of Economic Forecasting, Romanian Academy)

  • Dospinescu, Andrei Silviu

    ()
    (Centre for Industrial Economics, Romanian Academy)

Abstract

The paper intends to present synthetically the main approaches to computing core inflation, taking into consideration the importance of core inflation for conducting monetary policy. At the same time, the paper computes different measures of core inflation using methods based on excluding certain categories of prices from overall inflation rate and methods based on excluding from the overall inflation rate temporary movements of various prices which at different moments register extremely high volatility (using trimmed methodology). For the monetary policies it is important to select the inflation indicator with the lowest volatility. In this respect, the paper analyzes the efficiency of the computed core inflation indicators using a statistical approach. At the same time, the paper analyzes the usefulness of core indicators for monetary policy measures.

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Bibliographic Info

Article provided by Institute for Economic Forecasting in its journal Romanian Journal of Economic Forecasting.

Volume (Year): 5 (2008)
Issue (Month): 1 (March)
Pages: 134-148

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Handle: RePEc:rjr:romjef:v:5:y:2008:i:1:p:134-148

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Related research

Keywords: core inflation; price stability; methods of computation;

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References

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  1. Ball, L. & Mankiw, G.H., 1992. "Relative-Price Change as Aggregate Supply Shocks," Harvard Institute of Economic Research Working Papers 1609, Harvard - Institute of Economic Research.
  2. Quah, Danny, 1995. "Measuring Core Inflation," CEPR Discussion Papers 1153, C.E.P.R. Discussion Papers.
  3. Danny Quah & Danny Quah & Shaun P. Vahey, 1995. "Measuring Core Inflation," CEP Discussion Papers dp0254, Centre for Economic Performance, LSE.
  4. repec:wop:imespe:9707 is not listed on IDEAS
  5. Parks, Richard W, 1978. "Inflation and Relative Price Variability," Journal of Political Economy, University of Chicago Press, vol. 86(1), pages 79-95, February.
  6. Michael F. Bryan & Christopher J. Pike, 1991. "Median price changes: an alternative approach to measuring current monetary inflation," Economic Commentary, Federal Reserve Bank of Cleveland, issue Dec.
  7. Dobrescu, Emilian, 1996. "Macromodels of the Romanian transition Economy," MPRA Paper 35810, University Library of Munich, Germany.
  8. Michael F. Bryan & Stephen G. Cecchetti & Rodney L. Wiggins II, 1997. "Efficient Inflation Estimation," NBER Working Papers 6183, National Bureau of Economic Research, Inc.
  9. Michael F. Bryan & Stephen G. Cecchetti, 1994. "Measuring Core Inflation," NBER Chapters, in: Monetary Policy, pages 195-219 National Bureau of Economic Research, Inc.
  10. Wynne, Mark A., 1999. "Core inflation: a review of some conceptual issues," Working Paper Series 0005, European Central Bank.
  11. Shiratsuka, Shigenori, 1997. "Inflation Measures for Monetary Policy: Measuring the Underlying Inflation Trend and Its Implication for Monetary Policy Implementation," Monetary and Economic Studies, Institute for Monetary and Economic Studies, Bank of Japan, vol. 15(2), pages 1-26, December.
  12. Blejer, Mario I & Leiderman, Leonardo, 1980. "On the Real Effects of Inflation and Relative-Price Variability: Some Empirical Evidence," The Review of Economics and Statistics, MIT Press, vol. 62(4), pages 539-44, November.
  13. Buiter, Willem H & Miller, Marcus, 1981. "Monetary Policy and International Competitiveness: The Problems of Adjustment," Oxford Economic Papers, Oxford University Press, vol. 33(0), pages 143-75, Supplemen.
  14. Christine Gartner & Gert Wehinger, 1998. "Core Inflation in Selected European Union Countries," Working Papers 33, Oesterreichische Nationalbank (Austrian Central Bank).
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Cited by:
  1. Zina V.MARCU căs. CIORAN, 2013. "Monetary Policy And The Inflation Targeting Strategy," SEA - Practical Application of Science, Fundația Română pentru Inteligența Afacerii, Editorial Department, issue 2, pages 167-173, October.
  2. repec:cmj:journl:y:2013:i:29:cioran is not listed on IDEAS

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