Identifying Domestic and Imported Core Inflation

Author/Editor:

Hilde C. Bjørnland

Publication Date:

January 1, 2000

Electronic Access:

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Disclaimer: This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate

Summary:

This paper estimates core inflation in Norway, identified as that component of inflation that has no long-run effect on GDP. The model distinguishes explicitly between domestic and imported core inflation. The results show that (domestic) core inflation is the main component of CPI inflation. CPI inflation, however, misrepresents core inflation in some periods. The differences are well explained by the other shocks identified in the model, in particular the oil price shocks of the 1970s when Norway imported inflation, and the negative noncore (supply) shocks of the late 1980s, which pushed inflation up temporarily relative to core inflation.

Series:

Working Paper No. 00/4

Subject:

English

Publication Date:

January 1, 2000

ISBN/ISSN:

9781451842036/1018-5941

Stock No:

WPIEA0042000

Price:

$15.00 (Academic Rate:$15.00)

Format:

Paper

Pages:

25

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