{"title":"Behavior of a New Median PCE Measure: A Tale of Tails","authors":"Daniel R. Carroll, Randal J. Verbrugge","doi":"10.26509/FRBC-EC-201910","DOIUrl":null,"url":null,"abstract":"We introduce two new measures of trend inflation, a median PCE inflation rate and a median PCE excluding OER inflation rate, and investigate their performance. Our analysis indicates that both perform comparably to other simple trend inflation estimators such as the trimmed-mean PCE. Furthermore, we find that the performance of the median PCE is related to skewness in the distribution of cross-sectional growth rates across categories in the PCE, and our results suggest that the Bowley skewness statistic may be useful in forecasting.","PeriodicalId":313912,"journal":{"name":"Economic Commentary (Federal Reserve Bank of Cleveland)","volume":"9 1","pages":"0"},"PeriodicalIF":0.0000,"publicationDate":"2019-07-09","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":"14","resultStr":null,"platform":"Semanticscholar","paperid":null,"PeriodicalName":"Economic Commentary (Federal Reserve Bank of Cleveland)","FirstCategoryId":"1085","ListUrlMain":"https://doi.org/10.26509/FRBC-EC-201910","RegionNum":0,"RegionCategory":null,"ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":null,"EPubDate":"","PubModel":"","JCR":"","JCRName":"","Score":null,"Total":0}
引用次数: 14
Abstract
We introduce two new measures of trend inflation, a median PCE inflation rate and a median PCE excluding OER inflation rate, and investigate their performance. Our analysis indicates that both perform comparably to other simple trend inflation estimators such as the trimmed-mean PCE. Furthermore, we find that the performance of the median PCE is related to skewness in the distribution of cross-sectional growth rates across categories in the PCE, and our results suggest that the Bowley skewness statistic may be useful in forecasting.
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