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Licensed Unlicensed Requires Authentication Published by De Gruyter November 30, 2019

An Alternative Core Inflation Measure

Michael Pedersen
From the journal German Economic Review

Abstract

We combine the ideas of the trimmed mean and the Edgeworth index to construct an alternative measure of core inflation named ‘Trim of Most Volatile Components (TMVC)’. At each point of time, this measure trims away the components of the price index that have been most volatile in the recent past. Statistical tests indicate that neither the trimmed mean nor the Edgeworth index dominates the TMVC in terms of tracking trend inflation.

Published Online: 2019-11-30
Published in Print: 2009-05-01

© 2019 by Walter de Gruyter Berlin/Boston

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