Open Access Open Access  Restricted Access Subscription Access

Estimation of Core Inflation using Robust Methods for Turkey

A. N. ÇATIK, A. Ö. ÖNDER

Abstract


In this paper using various trimmed mean estimators we aim to compute robust measures of core inflation for Turkey. For this purpose we use monthly 75 cross-sectional components of HICP (Harmonized Indices of Consumer Prices) at three digits covering the period 1996:01-2007:05. Although we find that all exclusion based measures are unbiased predictor of the headline inflation, robust measures generally perform better in some important aspects. Among the robust indicators, Jarque-Bera trimmed means most accurately tracks underlying trend of inflation and is the most powerful predictor. MAD trimmed means introduced in this study and asymmetric trimmed means have also better ability to track trend of inflation than the exclusion based indicators. In this respect the robust measures can be considered by the policymakers as important intermediate targets in the framework of maintaining price stability.

Keywords


Inflation, Core inflation, Distribution, Robust estimators, Trimmed mean, Turkey.

Full Text:

PDF


Disclaimer/Regarding indexing issue:

We have provided the online access of all issues and papers to the indexing agencies (as given on journal web site). It’s depend on indexing agencies when, how and what manner they can index or not. Hence, we like to inform that on the basis of earlier indexing, we can’t predict the today or future indexing policy of third party (i.e. indexing agencies) as they have right to discontinue any journal at any time without prior information to the journal. So, please neither sends any question nor expects any answer from us on the behalf of third party i.e. indexing agencies.Hence, we will not issue any certificate or letter for indexing issue. Our role is just to provide the online access to them. So we do properly this and one can visit indexing agencies website to get the authentic information.