2011
DOI: 10.2139/ssrn.1982524
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The Usefulness of Core PCE Inflation Measures

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Cited by 8 publications
(11 citation statements)
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“…2 Detmeister (2011) is the paper most closely related to this study, and it reaches many similar conclusions regarding the PCE price index. On the topic of "core" measures, see also Rich and Steindel (2007), who state: "…we cannot identify a compelling analytical reason, on either an ex ante or ex post basis, to concentrate attention on a measure of inflation that excludes food and energy prices."…”
Section: Introductionsupporting
confidence: 74%
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“…2 Detmeister (2011) is the paper most closely related to this study, and it reaches many similar conclusions regarding the PCE price index. On the topic of "core" measures, see also Rich and Steindel (2007), who state: "…we cannot identify a compelling analytical reason, on either an ex ante or ex post basis, to concentrate attention on a measure of inflation that excludes food and energy prices."…”
Section: Introductionsupporting
confidence: 74%
“…First, the core CPI has been decisively rejected as an appropriate measure of core inflation in the CPI (see also Detmeister (2011) and Crone et al (2013) for similar findings regarding core PCE inflation). Second, two trend inflation indicators do pretty well across the board: the 12-month CPI-U, and the SA-NSA Median CPI.…”
Section: Figurementioning
confidence: 99%
“…Similarly, Meyer and Pasaogullari (2010) found that either the trimmed mean CPI or inflation expectations from the Survey of Professional Forecasters generally were better predictors of future CPI inflation than the CPI excluding food and energy. Further, Detmeister (2011) found that PCE inflation excluding food and energy performed worse at matching a handful of ex-post PCE inflation benchmarks than a number of alternative approaches to core inflation. 4,5 One response to the relatively poor performance of inflation excluding food and energy is to emphasize a different type of measure, such as the trimmed mean, which removes the items with the highest and lowest inflation rates each month, or varianceweighted inflation, which puts less weight on items which have highly variable inflation.…”
mentioning
confidence: 99%
“…Aside from food and energy, it would also exclude around 2/3 of other goods consumption and 1/3 of other services consumption-dropping items such as used car margins, tobacco, furniture, life and car insurance, imputed financial services, and most transportation services. 4 The alternative approaches to PCE inflation examined by Detmeister (2011) included various exclusion indexes, trimmed mean and weighted medians, variance-weighting inflation, weights based on regression coefficients, cost of nominal distortions weighting (CONDI), trend inflation from Stock and Watson's UC-SV model, Michigan inflation expectations, and component smoothing. These alternatives will be compared to the current approach later in this paper, most notably in figure 2.…”
mentioning
confidence: 99%
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