Measuring Core Inflation in Indonesia: An Asymmetric Trimmed-Mean Approach

Kacaribu, Febrio (2002): Measuring Core Inflation in Indonesia: An Asymmetric Trimmed-Mean Approach.

Abstract

Given the highly kurtotic and positively skewed characteristics of cross-sectional distribution of price, asymmetric trimmed-mean is the best approach in extracting the statistical medium-term trend of inflation.

This paper uses asymmetric trimmed-mean approach to measure core inflation in Indonesia. This measure, as compared with the headline inflation, is more correlated with the growth of money supply in the past. Additionally, it is a reliable indicator of inflation trend.

• Item Type: MPRA Paper
• Language: English
• Keywords: Core Inflation; Trimmed Mean; Indonesia
• Subjects: C - Mathematical and Quantitative Methods > C4 - Econometric and Statistical Methods: Special Topics > C43 - Index Numbers and Aggregation; E - Macroeconomics and Monetary Economics > E3 - Prices, Business Fluctuations, and Cycles > E31 - Price Level ; Inflation ; Deflation; E - Macroeconomics and Monetary Economics > E5 - Monetary Policy, Central Banking, and the Supply of Money and Credit > E50 - General

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