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, Working Papers Homepage
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 E31 C80 (search for similar items in EconPapers)
Pages: 46 pages
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Working Paper: Underlying Inflation Measures in Spain (2001)
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Persistent link: https://EconPapers.repec.org/RePEc:bde:wpaper:9911
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