.e. whose price changes rarely) contain more information about medium term inflation developments than those of flexible price … inflation index indeed has a forward-looking component, as it has favorable inflation forecasting properties on the policy … horizon of 1-2 years to alternative inflation indicators (including core inflation). Both theoretical and empirical results …

In closed or open economy models with complete markets, targeting core inflation enables monetary policy to maximize … is high. We develop an open economy model with incomplete financial markets to show that headline inflation targeting … headline inflation, assigns zero weight to import prices. …

The standard measure of core or underlying inflation is the inflation rate excluding food and energy prices. This paper … constructs an alternative measure, the weighted median inflation rate, for 38 advanced and emerging economies using subclass …, and more closely related to headline inflation over the next year. The weighted median also has a drawback: in most …

Using state-space modeling, we extract information from surveys of long-term inflation expectations and multiple … quarterly inflation series to undertake a real-time decomposition of quarterly headline PCE and GDP-deflator inflation rates … approaches to real-time forecasting of headline PCE inflation. We find that performance is enhanced if forecasting equations are …

Monetary policymakers and long-term investors would benefit greatly from a measure of underlying inflation that uses … all relevant information, is available in real time, and forecasts inflation better than traditional underlying inflation … measures such as core inflation measures. This paper presents the “FRBNY Staff Underlying Inflation Gauge (UIG)” for CPI and …