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Although the concept of core inflation is apparently well defined and intuitively
A policy effectivenessbased approach
aggregate demand aggregate inflation alternative core inflation appraise the performance approach based core inflation Based Standard Model Batini Cecchetti 1994 Central Bank coefficients compute core inflation indicators core inflation measures Diewert distribution of price empirical application energy and food euro area European Central Bank Excl explicitly extended Taylor-type Figure food and energy food Edgeworth forecasting ability framework future inflation headline inflation Impulse Responses lagged long-run core inflation loss function loss minimisation problem measure of core Model based core Model Based Standard model-dependent monetary policy rule monetary policy-maker Nominal Interes rate nominal interest rate o(inflation optimal rule output gap overall inflation paper parameters policy-maker's popular core inflation price changes price dynamics prices shock propose react Real Interest rate Section sectoral inflation equations sectoral inflation rates September 2006 Standard Model Based Stefano Iezzi sub-components Taylor-type rule underlying inflation indicators variables volatile components weight