Icelandic research proposes new measure of core inflation
‘Dynamic factor measure' outperforms current core measures in matching the mean of CPI inflation
A dynamic factor measure of core inflation, presented in a new Central Bank of Iceland working paper, would be a valuable addition to the institution's suite of indicators, according to the author of the research.
A Dynamic Factor Model for Icelandic Core Inflation by Bjarni Einarsson presents a new measure of core inflation using monthly data on 210 subcomponents of Iceland's consumer price index. It thens compares this with an existing set of core inflation measures currently monitored by the
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