Journal Article
Behavior of a New Median PCE Measure: A Tale of Tails
Abstract: We introduce two new measures of trend inflation, a median PCE inflation rate and a median PCE excluding OER inflation rate, and investigate their performance. Our analysis indicates that both perform comparably to other simple trend inflation estimators such as the trimmed-mean PCE. Furthermore, we find that the performance of the median PCE is related to skewness in the distribution of cross-sectional growth rates across categories in the PCE, and our results suggest that the Bowley skewness statistic may be useful in forecasting.
Keywords: inflation; measurement;
https://doi.org/10.26509/frbc-ec-201910
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https://doi.org/10.26509/frbc-ec-201910
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Bibliographic Information
Provider: Federal Reserve Bank of Cleveland
Part of Series: Economic Commentary
Publication Date: 2019-07-09
Volume: 2019
Issue: 10