Federal Reserve Bank of Dallas
Two Measures of Core Inflation: A Comparison
Trimmed-mean Personal Consumption Expenditure (PCE) inflation does not clearly dominate ex-food-and-energy PCE inflation in real-time forecasting of headline PCE inflation. However, trimmed-mean inflation is the superior communications and policy tool because it is a less-biased real-time estimator of headline inflation and because it more successfully filters out headline inflation’s transitory variation, leaving only cyclical and trend components.
Cite this item
James Dolmas & Evan F. Koenig, Two Measures of Core Inflation: A Comparison, Federal Reserve Bank of Dallas, Working Papers 1903, 25 Feb 2019.
- E31 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Price Level; Inflation; Deflation
- E37 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Forecasting and Simulation: Models and Applications
- E52 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Monetary Policy
Keywords: inflation; trimmed mean; labor market slack; real-time data
This item with handle RePEc:fip:feddwp:1903
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