EconPapers    
Economics at your fingertips  
 

The parts are more than the whole: separating goods and services to predict core inflation

M. Henry Linder, Richard Peach () and Robert Rich

Current Issues in Economics and Finance, 2013, vol. 19, issue Aug

Abstract: Economists have not been altogether successful in their efforts to forecast ?core? inflation?an inflation measure that typically excludes volatile food and energy prices. One possible explanation is that the models used to make these forecasts fail to distinguish the forces influencing price changes in core services from those affecting price changes in core goods. While core services inflation depends on long-run inflation expectations and the degree of slack in the labor market, core goods inflation depends on short-run inflation expectations and import prices. By using a composite model that combines these different sets of explanatory variables, the authors of this study are able to improve upon the inflation forecasts produced by a standard model.

Keywords: Service industries; Inflation (Finance); Imports - Prices; Labor market; Economic forecasting (search for similar items in EconPapers)
Date: 2013
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (21)

Downloads: (external link)
https://www.newyorkfed.org/medialibrary/media/rese ... t_issues/ci19-7.html (text/html)
https://www.newyorkfed.org/medialibrary/media/research/current_issues/ci19-7.pdf (application/pdf)

Related works:
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:fip:fednci:y:2013:i:aug:n:v.19no.7

Ordering information: This journal article can be ordered from

Access Statistics for this article

More articles in Current Issues in Economics and Finance from Federal Reserve Bank of New York Contact information at EDIRC.
Bibliographic data for series maintained by Gabriella Bucciarelli ().

 
Page updated 2025-04-01
Handle: RePEc:fip:fednci:y:2013:i:aug:n:v.19no.7