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Underlying inflation in the spanish economy: estimation and methodology

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  • Espasa, Antoni
  • Llanos Matea, Maria de los

Abstract

This paper presents a methodology to analyse the inflationary process in Spain. It is based on forecasts of the Consumer Price Index using quantitative models to obtain a measure of underlying inflation and the expected medium-term value of the annual price growth rate, which is called inertia in the paper. Every time a new observation becomes available, the study of the underlying inflation and inertia allows to be performed a systematic analysis of the inflationary process. The estimation of underlying inflation and inertia has also proven useful to improve the measurement of some important economic indicators such as inflation differentials and ex-ante real interest rates.

Suggested Citation

  • Espasa, Antoni & Llanos Matea, Maria de los, 1991. "Underlying inflation in the spanish economy: estimation and methodology," UC3M Working papers. Economics 2817, Universidad Carlos III de Madrid. Departamento de Economía.
    • Handle: RePEc:cte:werepe:2817
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    References listed on IDEAS

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    1. Litterman, Robert B & Weiss, Laurence M, 1985. "Money, Real Interest Rates, and Output: A Reinterpretation of Postwar U.S. Data," Econometrica, Econometric Society, vol. 53(1), pages 129-156, January.
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    Cited by:

    1. Janine Aron & John Muellbauer & Coen Pretorius, 2004. "A Framework for Forecasting the Components of the Consumer Price," Development and Comp Systems 0409054, University Library of Munich, Germany.
    2. Espasa, Antoni & Senra, Eva, 2017. "22 Years of inflation assessment and forecasting experience at the bulletin of EU & US inflation and macroeconomic analysis," DES - Working Papers. Statistics and Econometrics. WS 24678, Universidad Carlos III de Madrid. Departamento de Estadística.
    3. Antoni Espasa & Eva Senra, 2017. "Twenty-Two Years of Inflation Assessment and Forecasting Experience at the Bulletin of EU & US Inflation and Macroeconomic Analysis," Econometrics, MDPI, vol. 5(4), pages 1-28, October.

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    Underlying inflation;

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