The headline inflation rate is subject to unpredictable, temporary, sector-specific shocks. Therefore, various measures … of core inflation have been proposed to isolate the underlying or permanent inflation component. In this paper, a number … euro area and the Netherlands. It turns out that none of the measures meets all the criteria. Core inflation measures can …

relevant in the current situation of low inflation as shown up by the traditional price indices. These indices are furthermore … presumably subject to upward biasses, so that it has become difficult to pinpoint actual inflation, and hence to formulate … monetary policy for EMU. Moreover, it has consequences for the money concept used. …