CORE INFLATION IN PERU: MEASUREMENT OPTIONS 1995 -2000.

Slides:

Advertisements

Similar presentations

1 AFDC MAFC Training Program Shanghai 8-12 December 2008 Interest Rate Risk Management Christine Brown Associate Professor Department of Finance The University.

Advertisements

The Impact of the USD/EUR Exchange Rate on Inflation in CEE Countries Ljubinko Jankov, Ivo Krznar, Davor Kunovac, Maroje Lang.

The role of inflation expectations in the New EU Member States Student: DORINA COBÎSCAN Supervisor: PhD. Professor MOISĂ ALTĂR Bucharest, 2010 THE ACADEMY.

Core Inflation in Brazil André Minella Tomiê Sugahara Research Department - Banco Central do Brasil VIII Annual Seminar August 2006 Work in Progress –

1 Core inflation measurement in Norway Ragnhild Nygaard Statistics Norway Presentation prepared for the UNECE Meeting on CPIs Geneva 2014.

Alternative measures to evaluate core inflation Banco Central do Brasil seminar on core inflation and price indices harmonization.

Consequences of Business Fluctuations Chapter 14.

2-5 : Normal Distribution

Evaluating alternative measures of Core Inflation for Argentina Laura D’Amato Juan Sotes Paladino and Lidia Sanz BCRA VIII Annual Seminar, Central Bank.

EVALUATING CORE INFLATION INDICATORS Carlos Robalo Marques Pedro Duarte Neves Luís Morais Sarmento.

Bank of Canada The Canadian Experience with Core Inflation Thérèse Laflèche at the VIII Annual Seminar, Central Bank of Brazil 11 August 2006.

Rental Housing Markets, the Incidence and Duration of Vacancy, and the Natural Vacancy Rate Stuart A. Gabriel and Frank E. Nothaft Journal of Urban Economics.

Fish Price Volatility Atle Oglend Roy Endré Dahl FAO FPI Workshop, Ischia,

The ECB Survey of Professional Forecasters Luca Onorante European Central Bank* (updated from A. Meyler and I.Rubene) October 2009 *The views and opinions.

UST. What is the Consumer Price Index (CPI)? the average change over time in the prices of: consumer items. goods services that people buy for day – to.

Forecasting inflation; The Fan Chart CCBS/HKMA May 2004.

Chapter 4 Global Economies 1 Section 4.2 Understanding the Economy Marketing Essentials.

Copyright PEER.tamu.edu. Data Analysis Definition: systematically identifying patterns in the information gathered and deciding how to organize,

Methodology for Core Inflation Calculation Olga Kalabukha Director of the Price Statistics Department of the SSSU.

2 LIBERALIZATION, PRODUCTIVITY AND AGGREGATE EXPENDITURE: FUNDAMENTAL DETERMINANTS OF REAL EQUILIBRIUM EXCHANGE RATE Juan Benítez Gabriela Mordecki XI.

Monetary Policy Committee Price, Monetary and Balance of Payments Developments V. Punchoo Head - Statistics Division 14 July 2014.

Estimators for IPCA core inflation Francisco Marcos R. Figueiredo Roberta Blass Staub June 7 th, 2001 Research Department Central Bank of Brazil.

Norges Bank Monetary Policy Filename Economics Department 1 Alternative indicators of core inflation for Norway Einar W. Nordbø Norges Bank Geneva, 11.5.

 Modern approach to the analysis of exchange rate: ◦ Fundamental difference between the characteristics of exchange rates and those of national price.

METAC / IMF price statistics mission October 12-28, 2008 New estimates for the national CPI Kari Manninen EconAdvisor.

Data for your Classroom from Ed Dolan’s Econ Blog What Does the CPI Measure? Inflation or the Cost of Living? What’s the Difference? July 23, 2014 Ed Dolan’s.

GDP Timescales Flash Estimates Richard Morrison GDP Branch Short Term Economic Indicators.

Dissertation Paper Student: ANGELA-MONICA MĂRGĂRIT Supervisor: Professor MOISĂ ALTĂR July 2003 ACADEMY OF ECONOMIC STUDIES BUCHAREST DOCTORAL SCHOOL OF.

Interstate Statistical Committee of the Commonwealth of Independent States (CIS STAT) Methodological approaches to measuring core inflation in the CIS.

BANCO DE MEXICO Mexico’s Underlying Inflation. IntroductionIntroduction Methodology for calculating Underlying Inflation in México The Mexican Experience.

1) What was the rating for Tolerance of Nicotine? 2) What is the cumulative rating for marijuana? 3) Which addictive property had the highest rating for.

Core Inflation: Measures and Their Choice Mick Silver IMF Statistics Department Joint UNECE/ILO Meeting on Consumer Price Indices (Geneva, May 2006)

ECE/ILO Meeting on Consumer Price Indices, May 10-12, 2006, Geneva1 A FAMILY OF INDICES IN THE ISRAELI CPI Yoel Finkel Central Bureau of Statistics, Israel.

Chapter 20 Volatility. Volatility  Fundamental volatility is due to unanticipated changes in instrument values Price changes due to adverse selection.

1 Chapter 27 Practice Quiz Tutorial The Phillips Curve and Expectations Theory ©2000 South-Western College Publishing.

A user point of view on core inflation measures Laurent Bilke Euro Area Macroeconomic Developments Division ECE/ILO meeting on CPI Geneve, 11 May 2006.

The Macrojournals Macro Trends Conference: New York 2015 Macroeconomic Determinants of Credit Growth in OECD Countries By Nayef Al-Shammari Assistant Professor.

DataPost Federal Reserve Bank of San Francisco Economic Education & Outreach Inflation Measuring Price Changes Date last updated: December 7, 2015.

Customize SAS Output Using ODS Joan Dong. The Output Delivery System (ODS) gives you greater flexibility in generating, storing, and reproducing SAS procedure.

Inflation Inflation is the rate at which the general level of prices for goods and services is rising and, consequently, the purchasing power of currency.

Introduction to the UK Economy. What are the key objectives of macroeconomic policy? Price Stability (CPI Inflation of 2%) Growth of Real GDP (National.

Inflation as a way to measure performance of developed and developing countries.

DataPost Federal Reserve Bank of San Francisco Economic Education Group Inflation Measuring Price Changes Date last updated: June 10, 2013.

Economics o Economics o Microeconomics o Macroeconomics o Resource Development o Adam Smith  freedom of ownership  profits o Invisible Hand o Malthusian.

1 1 Measuring Core Inflation in SN 1. Inflation versus Core Inflation 2. Monetary policy – operational target 3. Decide and Implement 4. Comparisons.

Defining & Calculating Inflation AP Macroeconomics.

FOOD INFLATION IN INDIA: TRENDS AND DETERMINANTS C.S.C. Sekhar Yogesh Bhatt Institute of Economic Growth NAARM-IFPRI-CESS Consultation workshop on Tackling.

G-20 Conference on Commodity Price Volatility Istanbul, September 13, 2011 Commodity Price Booms, the Global Economy, and Low-income Countries Thomas Helbling.

Seðlabanki Íslands Is inflation control more difficult in very small open economies? The Challenges of Globalisation for Small Open Economies with Independent.

Contents 1. What is a Consumer Price Index 2. Consumer Price Index of Sri Lanka 3. Price collection methods for CPI 4. Inflation & Measuring Inflation.

Microeconomics Topic 1: The Economic Problem

Inflation October 2016 Learning objective: To understand the definition of inflation and be able to evaluate which parts of the economy lose or win as.

Session 12: Core inflation measurement methods

Monetary Policy Transmission Mechanism in Zambia

Link to Economics specification

INFLATION (last update: October 2016)

Inflation Measuring Price Changes

Macroeconomic 2.3.

Macroeconomic 2.3.

6.2 What is Inflation? In general, what you buy today will cost you more tomorrow. That is, if you buy $100 worth of groceries today, in one year those.

SA Economic Indicators

14 MONETARY POLICY Part 1.

INFLATION (last update: July 2018)

SA Economic Indicators

Flash indicator of macroecnomic inflation

INFLATION (last update: June 2014)

INFLATION (last update: July 2019)

1. CPI and underlying inflation Annual average, per cent

INFLATION (last update: August 2019)

INFLATION (last update: September 2019)

Presentation transcript:

CORE INFLATION IN PERU: MEASUREMENT OPTIONS

Definition of Core Inflation Price indicator free of transitory shocks, inflation component that depends on macroeconomic fundamentals. This indicator should allow the ex-post evaluation of monetary policy by the public and constitute an operative goal for monetary policy makers.

Properties of a Good Core Inflation Indicator It should not overestimate or underestimate inflation in the long run Variability lower than that of inflation Easy to understand by the public Stable in time Quick availability

Core Inflation Estimation Methods Trend methods Re-weighting of prices according to their volatility Econometric models –VAR error correction model

Core Inflation Estimation Methods Median (50th percentile): Distribution of price changes is skewed. Median underestimates inflation. Cumulative variation of median : 33,7% (versus 49,7% of CPI). The percentile 59 contains the arithmetic mean most times between 1995 and Cumulative variation : 46,2%. Volatility: 50% lower than CPI volatility. Disadvantage: The selected percentile changes in time. It changed from 61 in 1999 to 59 in 2000.

Core Inflation Estimation Methods Exclusion of 15% and 20% of items with higher volatility in their monthly changes. Exclusion of items with higher volatility in their weighted contributions to inflation: chicken, potato, onion, bread, urban transportation, fish, eggs, citrus fruits and vegetables. Ad-hoc exclusion of items: non-tradable food, fuel and urban transportation.

Selected Core Inflation Indicators Option 1: CPI excluding items with higher volatility in their weighted contributions to inflation: chicken, potato, onion, bread, urban transportation, fish, eggs, citrus fruits and vegetables. Option 2: Option 1 excluding fuel. Option 3: CPI excluding non-tradable food, fuel and urban transportation.

Inflation and Core Inflation (Year to year variations) CPI Opt.1 Var% 95-00: 49,7 52,1 Std. dev.: 0,44 0,32

Inflation and Core Inflation (Year to year variations) CPI Opt.2 Var% 95-00: 49,7 50,1 Std. dev.: 0,44 0,35

Inflation and Core Inflation (Year to year variations) CPI Opt.3 Var% 95-00: 49,7 52,3 Std. dev.: 0,44 0,31

Conclusions All three measures meet the general properties of a good core inflation indicator. Option 3 filters recent supply shocks best. Option 2 mixes two different criteria by excluding from the CPI the items with higher volatility in their weighted contributions to inflation and also excluding fuel prices, that do not appear in that list. Option 3 was chosen as the core inflation measure.