HKS Affiliated Authors
Professor of Public Policy, HKS; Harold Hitchings Burbank Professor of Political Economy, FAS
Excerpt
Excerpt
Core Inflation and Trend Inflation. James Stock, June 2015, Paper. "An important input to monetary policymaking is estimating the current level of inflation. This paper examines empirically whether the measurement of trend inflation can be improved by using disaggregated data on sectoral inflation to construct indexes akin to core inflation, but with time-varying distributed lags of weights, where the sectoral weight depends on the time-varying volatility and persistence of the sectoral inflation series, and on the comovement among sectors. The model is estimated using U.S. data on 17 components of the personal consumption expenditure inflation index..." Link