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Motor fuel and core inflation

Author

Listed:
  • Basu, Abhishek
  • Mazumder, Sandeep

Abstract

We ask whether there exists a fixed exclusion method that is simpler to compute than the CPI excluding food and energy, yet also closely tracks the behavior of outlier exclusion measures such as the trimmed mean. We document that the CPI excluding motor fuel achieves both goals.

Suggested Citation

  • Basu, Abhishek & Mazumder, Sandeep, 2024. "Motor fuel and core inflation," Economics Letters, Elsevier, vol. 242(C).
    • Handle: RePEc:eee:ecolet:v:242:y:2024:i:c:s0165176524003549
    DOI: 10.1016/j.econlet.2024.111870
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    References listed on IDEAS

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    1. Laurence Ball & Sandeep Mazumder, 2011. "Inflation Dynamics and the Great Recession," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 42(1 (Spring), pages 337-405.
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    3. Randal Verbrugge, 2022. "Is it Time to Reassess the Focal Role of Core PCE Inflation in Assessing the Trend in PCE Inflation?," Revista Economía, Fondo Editorial - Pontificia Universidad Católica del Perú, vol. 45(89), pages 73-101.
    4. Elmar Mertens, 2016. "Measuring the Level and Uncertainty of Trend Inflation," The Review of Economics and Statistics, MIT Press, vol. 98(5), pages 950-967, December.
    5. William T. Gavin, 2011. "CPI inflation: running on motor fuel," Economic Synopses, Federal Reserve Bank of St. Louis.
    6. Todd E. Clark, 2001. "Comparing measures of core inflation," Economic Review, Federal Reserve Bank of Kansas City, vol. 86(Q II), pages 5-31.
    7. Laurence M. Ball & Daniel Leigh & Prachi Mishra & Antonio Spilimbergo, 2021. "Measuring U.S. Core Inflation: The Stress Test of COVID-19," NBER Working Papers 29609, National Bureau of Economic Research, Inc.
    8. William T. Gavin & Rachel J. Mandal, 2002. "Predicting inflation: food for thought," The Regional Economist, Federal Reserve Bank of St. Louis, issue Jan., pages 4-9.
    9. Laurence Ball & Daniel Leigh & Prachi Mishra, 2022. "Understanding US Inflation during the COVID-19 Era," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 53(2 (Fall)), pages 1-80.
    10. Christian Garciga & Randal J. Verbrugge & Saeed Zaman, 2024. "The Effect of Component Disaggregation on Measures of the Median and Trimmed-Mean CPI," Working Papers 24-02, Federal Reserve Bank of Cleveland.
    11. Smith, Julie K, 2004. "Weighted Median Inflation: Is This Core Inflation?," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 36(2), pages 253-263, April.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Inflation; Core inflation; Motor fuel;
    All these keywords.

    JEL classification:

    • E31 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Price Level; Inflation; Deflation

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    Access and download statistics

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