To Trim or Not to Trim? An Application of a Trimmed Mean Inflation Estimator to the United Kingdom

Preprint

1 January 1999

preprint
Published by Elsevier in SSRN Electronic Journal

https://doi.org/10.2139/ssrn.176688

Abstract

Although the target of monetary policy is clear, there have been suggestions that the conduct of monetary policy is improved by monitoring "trimmed mean" inflation rates, the mean of some central portion of the distribution of price changes. This paper assesses critically the theoretical and empirical arguments for trimming, and applies the concept of the "optimal trim" to the United Kingdom.

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