A Simple Adaptive Measure of Core Inflation
- 1 January 2002
- journal article
- research article
- Published by Project MUSE in Journal of Money, Credit and Banking
- Vol. 34 (1) , 94-113
- https://doi.org/10.1353/mcb.2002.0027
Abstract
This paper proposes a new measure of core inflation and compares it with several existing measures. The new measure is adaptive and is designed to track sudden and persistent movements in inflation, such as those arising from changes in monetary policy regimes. The adaptive measure filters out transients more effectively than existing measures, and it is a superior predictor of locally mean-reverting components of inflation.Keywords
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