Two Measures of Core Inflation: A Comparison

Jim Dolmas and Evan Koenig

No 1903, Working Papers from Federal Reserve Bank of Dallas

Abstract: Trimmed-mean Personal Consumption Expenditure (PCE) inflation does not clearly dominate ex-food-and-energy PCE inflation in real-time forecasting of headline PCE inflation. However, trimmed-mean inflation is the superior communications and policy tool because it is a less-biased real-time estimator of headline inflation and because it more successfully filters out headline inflation?s transitory variation, leaving only cyclical and trend components.

Keywords: inflation; trimmed mean; labor market slack; real-time data (search for similar items in EconPapers)
JEL-codes: E31 E37 E52 (search for similar items in EconPapers)
Pages: 20 pages
Date: 2019-02-25
New Economics Papers: this item is included in nep-mac and nep-mon
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Citations: View citations in EconPapers (8)

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Journal Article: Two Measures of Core Inflation: A Comparison (2019)
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Persistent link: https://EconPapers.repec.org/RePEc:fip:feddwp:1903

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DOI: 10.24149/wp1903

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