Underlying Inflation Measures in Spain

Luis Alvarez and María de los Llanos Matea
Authors registered in the RePEc Author Service: María de los Llanos Matea Rosa

Working Papers from Banco de España

Abstract: Applying the concept of underlying inflation can be thought of as an attempt to capture the general trend in inflation more accurately than with readily available data on headline inflation. In this paper a number of approaches to the analysis of underlying inflation are examined from a unifying standpoint, stressing their complementary nature, and empirical results are presented for the Spanish economy. Different measures differ from each other in the information set which is considered to be relevant for estimating the underlying rate of inflation. We first examine the simplest of the procedures that amounts to ignoring price developments in the most volatile sub-components of the CPI and then consider limited-influence estimators that take advantage of the information contained in the cross-sectional distribution of individual prices. Statistical methods of extracting the trend component of inflation are also discussed. Finally, measures that allow for the interplay of are other economic variables considered.

Keywords: Inflation measures; underlying inflation; limited-influence estimators; permanent inflation (search for similar items in EconPapers)
JEL-codes: C00 C80 E31 (search for similar items in EconPapers)
Pages: 46 pages
Date: 1999
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (18)

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Persistent link: https://EconPapers.repec.org/RePEc:bde:wpaper:9911

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