Measuring Core Inflation

Danny Quah ()

No 1153, CEPR Discussion Papers from Centre for Economic Policy Research

Abstract: In this paper we argue that measured (RPI) inflation is conceptually mismatched with core inflation: the difference is more than just `measurement error'. We propose a technique for measuring core inflation based on an explicit long-run economic hypothesis. Core inflation is defined as that component of measured inflation that has no (medium- to) long-run impact on real output - a notion that is consistent with the vertical long-run Phillips curve interpretation of the co-movements in inflation and output. We construct a measure of core inflation by placing dynamic restrictions on a vector autoregression (VAR) system.

Keywords: Core Inflation; Dynamic Restrictions; Vector Autoregression (search for similar items in EconPapers)
JEL-codes: C3 E3 (search for similar items in EconPapers)
Date: 1995-03
References: Add references at CitEc
Citations: View citations in EconPapers (143)

Downloads: (external link)
http://www.cepr.org/active/publications/discussion_papers/dp.php?dpno=1153 (application/pdf)

Related works:
Journal Article: Measuring Core Inflation? (1995)
Working Paper: Measuring Core Inflation (1995)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:cpr:ceprdp:1153

Ordering information: This working paper can be ordered from
http://www.cepr.org/ ... ers/dp.php?dpno=1153

Access Statistics for this paper

More papers in CEPR Discussion Papers from Centre for Economic Policy Research 33 Great Sutton Street, London EC1V 0DX, UK.
Bibliographic data for series maintained by CEPR ().