Measuring Core Inflation for Tunisia

The Empirical Economics Letters, 7(12): (December 2008) ISSN 1681 8997

12 Pages Posted: 19 Dec 2013

See all articles by Hedi Ben Haddad

Hedi Ben Haddad

Al-Imam Muhammad Ibn Saud Islamic University

Date Written: December 28, 2008

Abstract

This paper will derive a core inflation measure for Tunisia. The core inflation is estimated as the permanent component of headline inflation within the common trends and common cycles model allowing for both short (common cycles) and long-run (common trends) co-movements restrictions. The forecast ability of the estimated core inflation is then compared to the one of the estimated core inflation from common trends model (with only long-run co-movements restrictions). The out-of-sample analysis points towards the common trends and common cycles core inflation measure as being the best to predict the future inflationary trend.

Keywords: Trend-cycle decomposition, Common Cycles, Cointegration, Core inflation

JEL Classification: C32, C53, E31, E32, E52

Suggested Citation

Ben Haddad, Hedi, Measuring Core Inflation for Tunisia (December 28, 2008). The Empirical Economics Letters, 7(12): (December 2008) ISSN 1681 8997, Available at SSRN: https://ssrn.com/abstract=2369689

Hedi Ben Haddad (Contact Author)

Al-Imam Muhammad Ibn Saud Islamic University ( email )

P.B 5701
Riyadh, 11432
Saudi Arabia

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