%0 Journal Article
%T Constructing U.K. Core Inflation
%A Terence C. Mills
%J Econometrics
%D 2013
%I MDPI AG
%R 10.3390/econometrics1010032
%X The recent volatile behaviour of U.K. inflation has been officially attributed to a sequence of ˇ°unusualˇ± price changes, prompting renewed interest in the construction of measures of ˇ°core inflationˇ±, from which such unusual price changes may be down-weighted or even excluded. This paper proposes a new approach to constructing core inflation based on detailed analysis of the temporal stochastic structure of the individual prices underlying a particular index. This approach is illustrated using the section structure of the U.K. retail price index (RPI), providing a number of measures of core inflation that can be automatically calculated and updated to provide both a current assessment and forecasts of the underlying inflation rate in the U.K.
%K core inflation
%K index numbers
%K signal extraction
%K time series modelling
%U http://www.mdpi.com/2225-1146/1/1/32