A structural common factor approach to core inflation estimation and forecasting
Abstract
In the article we propose a new methodological approach to core inflation estimation, based on a frequency domain principal components estimator, suited to estimate systems of fractionally co-integrated processes. The proposed core inflation measure is the common persistent feature in inflation and excess nominal money growth and bears the interpretation of monetary inflation. The proposed measure is characterized by all the properties that an 'ideal' core inflation process should show, providing also a superior forecasting performance relative to other available measures.Download Info
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Bibliographic Info
Article provided by Taylor and Francis Journals in its journal Applied Economics Letters.
Volume (Year): 14 (2007)
Issue (Month): 3 ()
Pages: 163-169
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Citations
Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.Cited by:
- Wojciech Charemza & Imran Hussain Shah, 2012. "Stability Price Index, Core Inflation and Output Volatility," Discussion Papers in Economics 12/21, Department of Economics, University of Leicester.
- Cavallero, Alessandro, 2011. "The convergence of inflation rates in the EU-12 area: A distribution dynamics approach," Journal of Macroeconomics, Elsevier, vol. 33(2), pages 341-357, June.
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