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Measuring Core Inflation in Iran
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Ahmad Tashkini *   , Ghasem Tashkini |
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Abstract: (1188 Views) |
This study tries to measure core inflation in Iran's economy, using SVAR method, spanning the period 1973-2007. The necessity of knowing about core inflation is that it increases signals to likely noises (shocks). Through using coring inflation criteria in policy making, monetary policies become more effective, as policymakers just react to fluctuations in measured inflation, ignoring temporary noises. Core inflation criteria is an appropriate index for both the measurement of current and future inflation trends, and an applicable target for monetary policy.
In this study, core inflation is considered as "a component of measured inflation with no effect on real output either in the long run or short run". In an attempt to measure core inflation in Iran, three variables as oil price, gross national product, and consumer price index are deployed in a Structural Vector Auto Regressive (SVAR) model, imposing some restrictions to make the model compliant with the structure of Iran's economy. |
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| Keywords: Inflation Targeting, Core Inflation, Persistent and Intermittent Component, Statistical Approach, Model-Based Measures, Measure, SVAR Model |
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Full-Text [PDF 658 kb]
(249 Downloads)
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notification: Research |
Subject:
Special
Received: 2013/12/11 | Accepted: 2014/04/19 | Published: 2013/12/22
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