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Core Inflation Measures and Statistical Issues in Choosing Among them

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  • Mick Silver

Abstract

This paper provides an overview of statistical measurement issues relating to alternative measures of core inflation, and the criteria for choosing among them. The approaches to measurement considered include exclusion-based methods, imputation methods, limited influence estimators, reweighting, and economic modeling. Criteria for judging which approach to use include credibility, control, deviations from a smoothed reference series, volatility, predictive ability, causality and cointegration tests, and correlation with money supply. Country practice can differ in how the approaches are implemented and how their appropriateness is assessed. There is little consistency in the results of country studies to readily suggest guidelines on accepted methods.

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Bibliographic Info

Paper provided by International Monetary Fund in its series IMF Working Papers with number 06/97.

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Length: 58
Date of creation: 01 Apr 2006
Date of revision:
Handle: RePEc:imf:imfwpa:06/97

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Keywords: Inflation targeting; Consumer price indexes; Economic models; inflation; central bank; money supply; monetary authorities; monetary policy; inflation target; relative price; inflation rate; monetary fund; inflation rates; rate of inflation; low inflation; price level; relative prices; monetary growth; measure of inflation; inflation-targeting; inflation targeting framework; monetary economics; aggregate demand; monetary phenomena; inflationary pressure; real output; monetary phenomenon; expectations of inflation; monetary ? inflation; monetary base; high inflation; national bank; average inflation; forecasting inflation; price mechanism; increase in interest rates; gdp deflator; price inflation; actual inflation; terms of trade; monetary authority; inflation data; price stability; monetary aggregates;

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References

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Cited by:
  1. Brieuc Monfort & Santiago Peña, 2008. "Inflation Determinants in Paraguay: Cost Push versus Demand Pull Factors," IMF Working Papers 08/270, International Monetary Fund.
  2. Felipe Córdova & María Carolina Grünwald & Michael Pedersen, 2008. "Alternative Measures of Core Inflation in Chile," Working Papers Central Bank of Chile 471, Central Bank of Chile.

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