Weighted Median Inflation Around the World: A Measure of Core Inflation

Laurence Ball, Carlos Carvalho, Christopher Evans and Luca Ricci

No 31032, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: The standard measure of core or underlying inflation is the inflation rate excluding food and energy prices. This paper constructs an alternative measure, the weighted median inflation rate, for 38 advanced and emerging economies using subclass level disaggregation of the CPI over 1990-2021, and compares the properties of this measure to those of standard core. For quarterly data, we find that the weighted median is less volatile than standard core, more closely related to economic slack, and more closely related to headline inflation over the next year. The weighted median also has a drawback: in most countries, it has a lower average level than headline inflation. We therefore also consider a measure of core inflation that eliminates this bias, which is based on the percentile of sectoral inflation rates that matches the sample average of headline CPI inflation.

JEL-codes: C43 E31 E52 (search for similar items in EconPapers)
Date: 2023-03
New Economics Papers: this item is included in nep-des, nep-mac and nep-mon
Note: IFM ME
References: Add references at CitEc
Citations: View citations in EconPapers (1)

Published as Laurence Ball & Carlos Carvalho & Christopher Evans & Luca Antonio Ricci, 2024. "Weighted Median Inflation Around the World: A Measure of Core Inflation," Journal of International Money and Finance, vol 142.

Downloads: (external link)
http://www.nber.org/papers/w31032.pdf (application/pdf)

Related works:
Journal Article: Weighted Median Inflation Around the World: A Measure of Core Inflation (2024)
Working Paper: Weighted Median Inflation Around the World: A Measure of Core Inflation (2023)
Working Paper: Weighted Median Inflation Around the World: A Measure of Core Inflation (2023)
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:nbr:nberwo:31032

Ordering information: This working paper can be ordered from
http://www.nber.org/papers/w31032

Access Statistics for this paper

More papers in NBER Working Papers from National Bureau of Economic Research, Inc National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138, U.S.A.. Contact information at EDIRC.
Bibliographic data for series maintained by ().