and personal consumption expenditure inflation over three sample periods: 1959:1–1979:1, 1979:2–2001:2, and 1985 …:1–2007:2. Headline and core inflation measures are co-integrated, suggesting long-run co-movement. However, the ways these two variables … sample period, when a positive gap opens up with headline inflation rising above core inflation, the gap is eliminated mainly …

dynamics of inflation implied by macroeconomic data, the model needs to assume an average duration of price contracts which is …