Two Measures of Core Inflation: A Comparison

Trimmed-mean personal consumption expenditure (PCE) inflation does not clearly dominate PCE inflation excluding food and energy in real-time forecasting of headline PCE inflation. However, trimmed-mean inflation is the superior communications and policy tool because it has been a lessbiased real-tim...

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Bibliographic Details
Published in:Review - Federal Reserve Bank of St. Louis 2019-12, Vol.101 (4), p.245-258
Main Authors: Dolmas, Jim, Koenig, Evan F
Format: Article
Language:English
Subjects:
Advantages
Analysis
Banking industry
Central banks
Consumer Price Index
Consumption (Economics)
Energy
Expenditures
Food
Food consumption
Forecasting
Forecasts and trends
Inflation
Inflation (Economics)
Inflation rates
Monetary policy
Moore, Brian (Canadian novelist)
Personal expenditure
Phillips curve
Price indexes
Citations: Items that cite this one
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Summary:Trimmed-mean personal consumption expenditure (PCE) inflation does not clearly dominate PCE inflation excluding food and energy in real-time forecasting of headline PCE inflation. However, trimmed-mean inflation is the superior communications and policy tool because it has been a lessbiased real-time estimator of headline inflation and because it more successfully filters out headline inflation's transitory variation, leaving only cyclical and trend components. (JEL E31, E37, E52)
ISSN:0014-9187
2163-4505
DOI:10.20955/r.101.245-58