This paper evaluates the usefulness of various measures of core inflation for the conduct of monetary policy …. Traditional exclusion-based measures of core inflation are found to perform relatively poorly across a range of evaluation … move with macroeconomic drivers. All measures of core inflation, however, have limitations - consequently, there is merit …

.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 …