Why Should Central Banks Avoid the Use of the Underlying Inflation Indicator?
This paper assesses the usefulness of the commonly used underlying inflation indicator, in light of the criteria proposed in Marques et al. (2000). Empirical evidence for a group of six countries strongly suggets that the use of underlying inflation as an indicator of trend inflation should be avoided.
|Date of creation:||2000|
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Banco de Portugal, Economics and Research Department.
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