Evaluating Measures of Core Inflation

Thérèse Laf;èche and Jamie Armour
Additional contact information
Jamie Armour: Bank of Canada, http://www.bankofcanada.ca/

Bank of Canada Review, 2006, vol. 2006, issue Summer, pages 19-29

Abstract: Since the Bank of Canada adopted inflation targeting in 1991, it has focused on a measure of core inflation as a shorter-term guide for monetary policy. When the targets were renewed in 2001, the Bank adopted CPIX as its measure of core inflation because of the advantages it offered. Leflèche and Armour review the experience with CPIX and whether the criteria used to select it in 2001 still favour the measure today. They describe the various measures of core inflation monitored by the Bank and evaluate them on the basis of the volatility of the components, the volatility of the core measures themselves, absence of bias relative to total CPI, predictive power, and certain practical criteria, including timeliness and credibility. They conclude that CPIX still satisfies all the empirical and practical criteria.

Downloads: (external link)
http://www.bankofcan ... ummer06/lafleche.pdf full text (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Ordering information: This journal article can be ordered from
Publications Distribution, Bank of Canada, 234 Wellington Street, Ottawa, Ontario, K1A 0G9, Canada
http://www.bank-banq ... ication/pub_res.html

Access Statistics for this article

More articles in Bank of Canada Review from Bank of Canada
Address: 234 Wellington Street, Ottawa, Ontario, K1A 0G9, Canada
Series data maintained by ().