Which Core Inflation Measure for Vietnam?

This paper attempts to designate the most efficient core inflation measure for Vietnam. Five measures of core inflation are constructed to be considered based on different approaches proposed in the literature. These are: the excluding food price, the trimmed-mean, the weighted median, the exponentially smoothed and the output-neutral inflation. They are subsequently evaluated empirically for tracking the trend, predictive power and cointegration with the headline inflation. The key finding is that the output-neutral, which satisfies almost all of the evaluation criteria, can be a useful core inflation indicator for Vietnam. Besides, the central bank may also rely on either the trimmed-mean or weighted median for communication purposes due to their rather simple construction