Why should Central Banks avoid the use of the underlying inflation indicator?

This paper assesses the usefulness of the commonly used underlying inflation indicator, in light of the criteria proposed in Marques et al. [Evaluating Core Inflation Indicators, mimeo, 2001]. Empirical evidence for a group of six countries strongly suggests that the use of underlying inflation as a...

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Bibliographic Details
Published in:	Economics letters Vol. 75; no. 1; pp. 17 - 23
Main Authors:	Marques, Carlos Robalo, Neves, Pedro Duarte, da Silva, Afonso Gonçalves
Format:	Journal Article
Language:	English
Published:	Elsevier B.V 01-03-2002 Elsevier
Series:	Economics Letters
Subjects:	Banking Central banks Core inflation indicator Economic indicators Economics Evaluation Evaluation criteria Finance Inflation Underlying inflation E31 C43 E52 Core inflation indicator Evaluation criteria Underlying inflation
Online Access:	Get full text
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Summary:	This paper assesses the usefulness of the commonly used underlying inflation indicator, in light of the criteria proposed in Marques et al. [Evaluating Core Inflation Indicators, mimeo, 2001]. Empirical evidence for a group of six countries strongly suggests that the use of underlying inflation as an indicator of trend inflation should be avoided.
Bibliography:	ObjectType-Article-2 SourceType-Scholarly Journals-1 ObjectType-Feature-1 content type line 23
ISSN:	0165-1765 1873-7374
DOI:	10.1016/S0165-1765(01)00578-X