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Philly Fed: Don't Rely On Core Inflation

Posted on May 22, 2008

We find that food and energy prices are not the mostvolatile components of inflation and that depending on which inflationmeasure is used, core inflation is not necessarily the best predictorof total inflation... (emphasis added)-Core Measures of Inflation as Predictors of Total Inflation You may have overlooked a recent research piece out of the Federal Reserve Bank of Philadelphia and the Wharton School at University of Pennsylvania. Don't. The research team essentially found that Core Inflation is an erroneous way to measure ongoing price increases. Both of the main rationales offered f...

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core inflation , fed , greenspan