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Measuring Core Inflation in Romania Using the Dobrescu Method – A Comparative Approach

Author

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  • Dospinescu, Andrei Silviu

    (Center for Industry and Service Economy, National Institute for Economic Research, The Romanian Academy)

Abstract

The paper focuses on the persistent and non-persistent changes in relative prices and their relation with the volatility of the aggregated price index. From the methodological perspective, the paper analyzes the implications of the hypotheses of five main methods for calculating core inflation with respect to the persistent and non-persistent changes in relative prices. From the empirical perspective, the paper ranks the methods based on volatility and discusses the relation between volatility and the persistent and non-persistent changes in relative prices, focusing on the relation between the changes in the components of the CPI that tend to be irreversible and the CPI. In the context of the analysis, the main conclusion of the paper indicates that there is a long-term tendency of the CPI, which is reflected by the irreversible changes in relative prices

Suggested Citation

  • Dospinescu, Andrei Silviu, 2010. "Measuring Core Inflation in Romania Using the Dobrescu Method – A Comparative Approach," Journal for Economic Forecasting, Institute for Economic Forecasting, vol. 0(2), pages 308-319, July.
    • Handle: RePEc:rjr:romjef:v::y:2010:i:2:p:308-319
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    File URL: http://www.ipe.ro/rjef/rjef2_10/rjef2_10_20.pdf
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    References listed on IDEAS

    as
    1. Scott Roger, 1998. "Core inflation: concepts, uses and measurement," Reserve Bank of New Zealand Discussion Paper Series G98/9, Reserve Bank of New Zealand.
    2. Mark A. Wynne, 2008. "Core inflation: a review of some conceptual issues," Review, Federal Reserve Bank of St. Louis, vol. 90(May), pages 205-228.
    3. Michael F. Bryan & Stephen G. Cecchetti, 1994. "Measuring Core Inflation," NBER Chapters, in: Monetary Policy, pages 195-219, National Bureau of Economic Research, Inc.
    4. Michael F. Bryan & Stephen G. Cecchetti & Rodney L. Wiggins II, 1997. "Efficient Inflation Estimation," NBER Working Papers 6183, National Bureau of Economic Research, Inc.
    5. Jonathan Kearns, 1998. "The Distribution and Measurement of Inflation," RBA Research Discussion Papers rdp9810, Reserve Bank of Australia.
    6. Stephen G. Cecchetti, 1997. "Measuring short-run inflation for central bankers," Review, Federal Reserve Bank of St. Louis, issue May, pages 143-155.
    7. Scott Roger, 1998. "Core Inflation: Concepts, Uses and Measurement," Occasional Papers, South East Asian Central Banks (SEACEN) Research and Training Centre, number occ24, April.
    Full references (including those not matched with items on IDEAS)

    Citations

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    Cited by:

    1. Mija, Simion & Slobozian, Dorin & Cuhal, Radu & Stratan, Alexandru, 2013. "How Core Inflation Reacts to the Second Round Effects," Journal for Economic Forecasting, Institute for Economic Forecasting, vol. 0(1), pages 98-118, March.
    2. Paun, Cristian & Topan, Vladimir, 2013. "The Monetary Causes of Inflation in Romania," Journal for Economic Forecasting, Institute for Economic Forecasting, vol. 0(1), pages 5-23, March.

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    More about this item

    Keywords

    core inflation; relative prices; prices volatility; reversibility;
    All these keywords.

    JEL classification:

    • E31 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Price Level; Inflation; Deflation
    • E37 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Forecasting and Simulation: Models and Applications
    • C53 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Forecasting and Prediction Models; Simulation Methods
    • P22 - Political Economy and Comparative Economic Systems - - Socialist and Transition Economies - - - Prices

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