Does headline inflation converge to core?

Zheng Liu and Justin Weidner

FRBSF Economic Letter, 2011, issue aug1

Abstract: Recent surges in food and energy prices have pushed up headline inflation to levels well above its underlying trend. In contrast, core inflation, which excludes food and energy prices, has remained low and stable. Historical data suggest that, since the early 1990s, headline inflation has tended to converge toward core inflation. Thus, high inflation is unlikely to persist as long as inflation expectations remain anchored.

Keywords: Inflation; (Finance) (search for similar items in EconPapers)
Date: 2011
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Citations: View citations in EconPapers (7)

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