Identifying Domestic and Imported Core Inflation
Electronic Access:
Free Download. Use the free Adobe Acrobat Reader to view this PDF file
Summary:
This paper estimates core inflation in Norway, identified as that component of inflation that has no long-run effect on GDP. The model distinguishes explicitly between domestic and imported core inflation. The results show that (domestic) core inflation is the main component of CPI inflation. CPI inflation, however, misrepresents core inflation in some periods. The differences are well explained by the other shocks identified in the model, in particular the oil price shocks of the 1970s when Norway imported inflation, and the negative noncore (supply) shocks of the late 1980s, which pushed inflation up temporarily relative to core inflation.
Series:
Working Paper No. 2000/004
Subject:
Consumer price indexes Econometric analysis Inflation Inflation targeting Monetary policy Oil prices Prices Vector autoregression
English
Publication Date:
January 1, 2000
ISBN/ISSN:
9781451842036/1018-5941
Stock No:
WPIEA0042000
Pages:
25
Please address any questions about this title to publications@imf.org