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Core Inflation Measures and Statistical Issues in Choosing Among Them

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Author Info
Mick Silver

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

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Length: 58 pages
Date of creation: 26 Apr 2006
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Handle: RePEc:imf:imfwpa:06/97

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Keywords: Core Inflation; Core CPI; Inflation Targeting ; Inflation ; Consumer price indexes ; Inflation targeting ; Economic models ;

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Full references

Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. 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. [Downloadable!]
  2. Brieuc Monfort & Santiago Peña, 2008. "Inflation Determinants in Paraguay: Cost Push versus Demand Pull Factors," IMF Working Papers 08/270, International Monetary Fund. [Downloadable!]
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