Alternative Measures of Core Inflation in Romania

Elena Pelinescu and Andrei Silviu Dospinescu ()
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Andrei Silviu Dospinescu: Centre for Industrial Economics, Romanian Academy

Journal for Economic Forecasting, 2008, vol. 5, issue 1, pages 134-148

Abstract: The paper intends to present synthetically the main approaches to computing core inflation, taking into consideration the importance of core inflation for conducting monetary policy. At the same time, the paper computes different measures of core inflation using methods based on excluding certain categories of prices from overall inflation rate and methods based on excluding from the overall inflation rate temporary movements of various prices which at different moments register extremely high volatility (using trimmed methodology). For the monetary policies it is important to select the inflation indicator with the lowest volatility. In this respect, the paper analyzes the efficiency of the computed core inflation indicators using a statistical approach. At the same time, the paper analyzes the usefulness of core indicators for monetary policy measures.

Keywords: core inflation; price stability; methods of computation (search for similar items in EconPapers)
JEL-codes: E31 E37 C53 P22 (search for similar items in EconPapers)
Date: 2008
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Persistent link: http://EconPapers.repec.org/RePEc:rjr:romjef:v:5:y:2008:i:1:p:134-148

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