The research team essentially found that Core Inflation is an erroneous way to measure ongoing price increases. Both of the main rationales offered for policymakers for their focus on core measures of inflation do not survive close scrutiny, argues a group of researchers.Their main findings were that:
-Other components of Inflation are more Volatile than Food & Energy;
-Core Inflation is less Valuable as Inflation Forecastor;
-Combining CPI and PCE inflation measures can lead to more accurate forecasts
NOTE for those like me who didn't know this acronym: PCE == Personal Consumption Expenditure
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