RBI economists hunt for suitable core inflation measure

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“Exclusion-based” metrics may be the best way of measuring core inflation, research published by the Reserve Bank of India finds.

RBI economists Janak Raj, Sangita Misra, Asish Thomas George and Joice John say it is hard to find a measure of core inflation that achieves all desirable properties. The authors test 11 possible measures – six that exclude volatile components of the inflation calculation basket, and five statistical methods that remove outliers.

They test each for seven desirable

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