Premium
A NOTE ON THE TRIMMED MEAN MEASURE OF CORE INFLATION IN SOUTH AFRICA
Author(s) -
Blignaut Zelda,
Farrell Greg,
Munyama Victor,
Rangasamy Logan
Publication year - 2009
Publication title -
south african journal of economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.502
H-Index - 31
eISSN - 1813-6982
pISSN - 0038-2280
DOI - 10.1111/j.1813-6982.2009.01230.x
Subject(s) - truncated mean , core inflation , economics , inflation (cosmology) , headline , estimator , econometrics , index (typography) , measure (data warehouse) , core (optical fiber) , monetary policy , price index , consumer price index (south africa) , inflation rate , producer price index , weighted arithmetic mean , inflation targeting , monetary economics , price level , statistics , mathematics , computer science , business , mid price , database , theoretical physics , advertising , world wide web , telecommunications , physics
This paper constructs and analyses the properties of a trimmed mean inflation rate for South Africa. Based on an analysis of the distributions of the consumer price index component price changes, a measure is constructed that provides an estimator of core inflation, which may be particularly useful to policymakers in an inflation‐targeting environment. The trimmed mean estimator focuses on the price movements of individual components that have a strong bearing on the current and future trend of the headline inflation rate, allowing monetary policy to be directed at the persistent or underlying sources of inflationary pressures.