Statistical offices use the matched models method to compile consumer price indices (CPIs) to measure inflation. The … substantial underestimates of inflation. Hedonic indices use the whole sample. They are argued to be more useful to price … measurement in markets with a rapid turnover of models in order to avoid the demonstrated bias …

We build a novel term structure model for pricing synthetic euro area core inflation-linked swaps, a hypothetical swap … contract indexed to core inflation. Our approach relies on a term structure model of traded headline inflation-linked swap … rates, which we assume span core inflation. The model provides estimates of market-based expectations for core inflation, as …