Stability price index, core inflation and output volatility
AbstractThis article examines the relationship between the ‘exclusion’ type Core Inflation ( CI ) measures and the stability price index. Empirical results for Malaysia and Pakistan suggest that if targeting CI index is to stabilize output, weights of the export-oriented sectors (energy for Malaysia and foodstuffs for Pakistan) should be reduced, in relation to the CPI weights, and weights of the import-oriented sectors should be increased. It also indicates that, in order to maintain real sector stability, central bankers should include the fundamental component of the stock market prices in the price index they target.
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Bibliographic InfoArticle provided by Taylor & Francis Journals in its journal Applied Economics Letters.
Volume (Year): 20 (2013)
Issue (Month): 8 (May)
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Web page: http://www.tandfonline.com/RAEL20
Other versions of this item:
- 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.
- E52 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Monetary Policy
- E58 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Central Banks and Their Policies
- G12 - Financial Economics - - General Financial Markets - - - Asset Pricing; Trading Volume; Bond Interest Rates
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