The Seasonal Adjustment of the Harmonised Index of Consumer Prices for the Euro Area: a Comparaison of Derect and Indirect Methods.

In this paper we analyse the Harmonised Index of Consumer Prices, which plays a key role in conduct of monetary policy in the euro area. Knowledge of the characteristics of the short-term evolution of consumer prices for each country and for their average is important for better monitoring and forecasting of inflation in the euro area. In this paper we seek to verify to what extent the short-term variability of HICPs can be explained by regular infra-year movements which we then attempt to estimate. We find evidence that seasonal movements characterise most price series, though some differences arise across countries and sub-indices.