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Shocks de Precios Relativos e Inflación: La Mediana Ponderada como Medida de Inflación Subyacente en Chile

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  • Fernando Lefort

Abstract

Relative price shocks with zero mean can affect measured inflation in the presence of non-convex adjustment costs, if core inflation is different from zero or the distribution of the shock is asymetric. In such cases, central tendency measures of the shock's distribution are a better measure of core inflation. The purpose of this paper is to calculate and evaluate the properties of the weighted median as an indicator of core inflation in Chile. This paper analyzes the cross sectional distribution of price changes in Chile. It is shown that this distribution is very asymmetric, and that the degree of asymmetry is an important explanatory variable of actual inflation. In comparison to CPI and more traditional measures of core inflation, the weighted median is more correlated to past innovations in monetary aggregates, and constitutes a better predictor of future inflation.

Suggested Citation

  • Fernando Lefort, 1997. "Shocks de Precios Relativos e Inflación: La Mediana Ponderada como Medida de Inflación Subyacente en Chile," Working Papers Central Bank of Chile 01, Central Bank of Chile.
    • Handle: RePEc:chb:bcchwp:01
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    File URL: https://www.bcentral.cl/documents/33528/133326/DTBC_01.pdf
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    Cited by:

    1. M. Carolina Grünwald N. & Enrique Orellana C., 2004. "Medidas Alternativas de Inflación Subyacente," Notas de Investigación Journal Economía Chilena (The Chilean Economy), Central Bank of Chile, vol. 7(1), pages 93-101, April.

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