This paper uses wavelets to develop a core inflation measure for inflation targeting central banks. The analysis is … applied to the case of New Zealand – the country with the longest history of explicit inflation targeting. We compare the …-term trend in inflation. It also has comparable forecasting performance to standard benchmarks. …

's inflation target objective. …

downwards since at least the stabilisation of inflation in 1992. We present several alternative estimates of a time varying … relationship between the Neo-Wicksellian real interest rate gap and future inflation. As in Neiss and Nelson (2003), these two are …

may have been temporarily boosted. However, demand pressures would have probably been greater and inflation higher. In … particular, results suggest that over the latter part of the 1990s annual inflation would have been around 1 percentage point …, then the variability of inflation and output would increase over the business cycle. …

New Zealand data show that the inflation-output relationship is asymmetric. This asymmetry implies that positive demand … shocks tend to increase inflation by more than negative demand shocks of similar magnitudes reduce it. An important … implication of this asymmetry is that a monetary authority with the objective of maintaining the inflation rate within a narrow …

This paper introduces a new indicator of core inflation for New Zealand, estimated using a dynamic factor model and … with a wide range of other ‘core inflation’ measures estimated from disaggregate prices, such as the weighted median and … inflation outcomes. The 2 year centred moving average is used as an analytical approximation of the inflation target from the …

correlated with the business cycle, both output and inflation become more variable. However, the output gap is still useful for … stabilising output and inflation. Basing policy actions on the output gap directly and/or indirectly through forecasts of … inflation leads to better macroeconomic stability than basing policy actions solely on currently available observable data such …

This paper reviews the concept of core inflation, focusing on the alternative interpretations of core inflation as the … persistent or generalised element of inflation. The role of a core inflation measure in policy formulation, communication and … inflation. …