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- Title
MEASURING CORE INFLATION.
- Authors
Quah, Danny; Vahey, Shaun P.
- Abstract
In this paper, we argue that measured (RPI) inflation is conceptually mismatched with core inflation: the difference is more than just ‘measurement error’. We propose a technique for measuring core inflation, based on an. explicit long-run economic hypothesis. Gore inflation is defined as that component of measured inflation that has no (medium- to) long-run impact on real output - a notion that is consistent with the vertical long-run Phillips curve interpretation of the comovements in inflation and output. We construct a measure of core inflation by placing dynamic restrictions on a vector autoregression (VAR) system.
- Subjects
PRICE inflation; PHILLIPS curve; MATHEMATICAL models of inflation; AUTOREGRESSION (Statistics); REGRESSION analysis; ECONOMIC policy
- Publication
Economic Journal, 1995, Vol 105, Issue 432, p1130
- ISSN
0013-0133
- Publication type
Article
- DOI
10.2307/2235408