Core Inflation in Selected European Union Countries
We calculate core inflation indicators for Austria, Belgium, Finland, France, Germany, Italy, the Netherlands, Sweden and the United Kingdom using two structural vector-autoregression (SVAR) models. In the first one we use out-put and prices to identify supply and demand shocks by long-run identifying restrictions, for the second one we add short-term nominal interest rates to capture effects of monetary disturbances. Core inflation is then defined as driven by demand and, respectively, monetary shocks. Comparing our results to other studies we conclude that the resulting core inflation indicator can be regarded as helpful for monetary policy.
|Date of creation:||30 Sep 1998|
|Date of revision:|
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|Order Information:|| Postal: Oesterreichische Nationalbank, Economic Studies Division, c/o Beate Hofbauer-Berlakovich, POB 61, A-1011 Vienna, Austria|
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