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. …

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 …

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. …

It is standard to model the output-inflation trade-off as a linear relationship with a time-invariant slope. We assess … why large negative output gaps in Japan during the period 1998-2002 did not lead to accelerating deflation, but instead … coincided with stable, albeit moderately negative, inflation. We document that this episode is most convincingly interpreted as …

suggesting that inflation expectations in New Zealand are moving towards rational expectations. Theory suggests this will make it … easier to control inflation after a temporary disturbance. …

deterioration is less pronounced for rules that use forecasts of inflation rather than just contemporaneous inflation. Under the …

inflation, we examine models of inflation that do and do not use the output gap. The Phillips curve, which relates inflation to … real activity, is regarded as the maintained theory of inflation. Models of inflation without the output gap include the … paper examines ten different models of inflation and estimates sixty-seven different specifications, some of which …

This paper develops a stochastically-based method of measuring core inflation, extending earlier research by Bryan and …