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Core inflation: concepts, uses and measurement

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    Abstract

    This paper reviews the concept of core inflation, focusing on the alternative interpretations of core inflation as the persistent or generalised element of inflation. The role of a core inflation measure in policy formulation, communication and accountability is also discussed. The paper also outlines and comments on alternative empirical approaches taken to measuring core inflation.

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    File URL: http://www.rbnz.govt.nz/research_and_publications/discussion_papers/1998/g98_9.pdf
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    Bibliographic Info

    Paper provided by Reserve Bank of New Zealand in its series Reserve Bank of New Zealand Discussion Paper Series with number G98/9.

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    Length: 29p
    Date of creation: Jul 1998
    Date of revision:
    Handle: RePEc:nzb:nzbdps:1998/09

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    1. Thérèse Laflèche, 1997. "Statistical measures of the trend rate of inflation," Bank of Canada Review, Bank of Canada, Bank of Canada, vol. 1997(Autumn), pages 29-47.
    2. Claus, I., 1997. "A Measure of Underlying Inflation in the United States," Working Papers, Bank of Canada 97-20, Bank of Canada.
    3. Danny Quah & Danny Quah & Shaun P. Vahey, 1995. "Measuring Core Inflation," CEP Discussion Papers, Centre for Economic Performance, LSE dp0254, Centre for Economic Performance, LSE.
    4. Laurence Ball & N. Gregory Mankiw, 1992. "Asymmetric Price Adjustment and Economic Fluctuations," NBER Working Papers 4089, National Bureau of Economic Research, Inc.
    5. Douglas Laxton & Guy Meredith & David Rose, 1995. "Asymmetric Effects of Economic Activity on Inflation: Evidence and Policy Implications," IMF Staff Papers, Palgrave Macmillan, Palgrave Macmillan, vol. 42(2), pages 344-374, June.
    6. Michael F. Bryan & Stephen G. Cecchetti, 1993. "The consumer price index as a measure of inflation," Economic Review, Federal Reserve Bank of Cleveland, Federal Reserve Bank of Cleveland, issue Q IV, pages 15-24.
    7. Michael F. Bryan & Stephen G. Cecchetti, 1994. "Measuring Core Inflation," NBER Chapters, National Bureau of Economic Research, Inc, in: Monetary Policy, pages 195-219 National Bureau of Economic Research, Inc.
    8. Tsiddon, Daniel, 1993. "The (Mis)Behaviour of the Aggregate Price Level," Review of Economic Studies, Wiley Blackwell, Wiley Blackwell, vol. 60(4), pages 889-902, October.
    9. Stephen G. Cecchetti, 1996. "Measuring Short-Run Inflation for Central Bankers," NBER Working Papers 5786, National Bureau of Economic Research, Inc.
    10. Laidler, David E W & Parkin, J Michael, 1975. "Inflation: A Survey," Economic Journal, Royal Economic Society, Royal Economic Society, vol. 85(340), pages 741-809, December.
    11. Michael F. Bryan & Stephen G. Cecchetti & Rodney L. Wiggins II, 1997. "Efficient Inflation Estimation," NBER Working Papers 6183, National Bureau of Economic Research, Inc.
    12. Christine Gartner & Gert Wehinger, 1998. "Core Inflation in Selected European Union Countries," Working Papers, Oesterreichische Nationalbank (Austrian Central Bank) 33, Oesterreichische Nationalbank (Austrian Central Bank).
    13. Guy Debelle & Glenn Stevens, 1995. "Monetary Policy Goals for Inflation in Australia," RBA Research Discussion Papers, Reserve Bank of Australia rdp9503, Reserve Bank of Australia.
    14. Ball, Laurence & Mankiw, N Gregory, 1995. "Relative-Price Changes as Aggregate Supply Shocks," The Quarterly Journal of Economics, MIT Press, MIT Press, vol. 110(1), pages 161-93, February.
    15. Alchian, Armen A & Klein, Benjamin, 1973. "On a Correct Measure of Inflation," Journal of Money, Credit and Banking, Blackwell Publishing, Blackwell Publishing, vol. 5(1), pages 173-91, Part I Fe.
    16. 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, Federal Reserve Bank of Cleveland, issue Dec.
    17. Quah, Danny, 1995. "Measuring Core Inflation," CEPR Discussion Papers, C.E.P.R. Discussion Papers 1153, C.E.P.R. Discussion Papers.
    18. Douglas Laxton & Guy Meredith & David Rose, 1994. "Asymmetric Effects of Economic Activityon Inflation," IMF Working Papers, International Monetary Fund 94/139, International Monetary Fund.
    19. Parks, Richard W, 1978. "Inflation and Relative Price Variability," Journal of Political Economy, University of Chicago Press, University of Chicago Press, vol. 86(1), pages 79-95, February.
    20. Parkin, Michael, 1984. "On core inflation by Otto Eckstein : A review essay," Journal of Monetary Economics, Elsevier, Elsevier, vol. 14(2), pages 251-264, September.
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    Cited by:
    1. Cotter, John & Dowd, Kevin, 2006. "U.S. Core Inflation: A Wavelet Analysis," MPRA Paper 3520, University Library of Munich, Germany.
    2. Bilke, Laurent & Stracca, Livio, 2008. "A persistence-weighted measure of core inflation in the euro area," Working Paper Series, European Central Bank 0905, European Central Bank.
    3. Hogan, Seamus & Marianne Johnson & Thérèse Laflèche, 2001. "Core Inflation," Technical Reports, Bank of Canada 89, Bank of Canada.
    4. Ashima Goyal, 2009. "Through a Glass Darkly: Deciphering the Impact of Oil Price Shocks," Working Papers id:1826, eSocialSciences.
    5. Bermingham, Colin, 2006. "How Useful is Core Inflation for Forecasting Headline Inflation?," Research Technical Papers, Central Bank of Ireland 11/RT/06, Central Bank of Ireland.
    6. David Baqaee, 2009. "Using wavelets to measure core inflation: the case in New Zealand," Reserve Bank of New Zealand Discussion Paper Series, Reserve Bank of New Zealand DP2009/05, Reserve Bank of New Zealand.
    7. Oguz Atuk & Mustafa Utku Ozmen, 2009. "Design and Evaluation of Core Inflation Measures for Turkey," Working Papers, Research and Monetary Policy Department, Central Bank of the Republic of Turkey 0903, Research and Monetary Policy Department, Central Bank of the Republic of Turkey.
    8. C. Felipe Jaramillo y Otros, . "La Inflación Básica en Colombia: Evaluación de Indicadores Alternativos," Borradores de Economia, Banco de la Republica de Colombia 136, Banco de la Republica de Colombia.
    9. Alan Mankikar & Jo Paisley, 2004. "Core inflation: a critical guide," Bank of England working papers, Bank of England 242, Bank of England.

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