Measuring US Core Inflation: A Structural Var Approach

Samuel Albert Andriamiarintsaina RANDRIA

Abstract


The main objective of this work was to determine the core inflation in the United States over the period from the first quarter of 1979 to the first quarter of 2023 based on the techniques of the methods of Blanchard and Quah (1989), Quah and Vahey (1995) and Marianno Matilla Garcia et al. (2002). We determine the core inflation using a structural VAR from the following five variables:  is the real GDP growth rate,   is the change in the interest rate,  is the price growth rate and   is the change in the money supply.

The results obtained are fully consistent with those predicted by economic theory. Analysis of the graphics showed that core inflation remains above observed inflation in periods when the changes in the M3 money supply and   were high and below it in periods when changes in the M3 money supply were moderate.


Keywords


Core inflation, Structural VAR approach, Customs Revenue, Monetary policies.

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References


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DOI: http://dx.doi.org/10.52155/ijpsat.v50.1.7143

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