Selected methods of the determination of core inflation
Selected methods of the determination of core inflation

Summary/Abstract: Core inflation can be defined as the part of price change, which is used to assess the medium-and long-run growth trend in the prices of consumer goods and services in the economy. Usually it is assumed that core inflation is linked to expected inflation and de-mand pressure and is independent of supply shocks. The core inflation indicators allow for assessing the inflationary processes in the economy and therefore they are helpful in choos-ing investment and monetary decisions in the medium-run and long-run. We can distinguish many measures of core inflation. Therefore, the purpose of this article is use alternative measures of core inflation based on selected low pass filter, such as: exponentially weighted moving average, Holt’s exponential smoothing, Hodrick-Prescott filter and Baxter-King fil-ter. In the article we empirically compare these alternative measures with traditional measures of core inflation calculated by the NBP.

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