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Core Inflation
Core inflation represents the long run trend in the price level. In measuring long run inflation, transitory price changes should be excluded. One way of accomplishing this is by excluding items frequently subject to volatile prices, like food and energy. History The concept of core inflation as aggregate price growth excluding food and energy was introduced in a 1975 paper by Robert J. Gordon. This is the definition of "core inflation" most used for political purposes. The core inflation model was subsequently developed and advocated by Otto Eckstein, in a paper published in 1981. According to the economic theory historian Mark A. Wynne, "Eckstein was the first to propose a formal definition of core inflation, as the 'trend rate of increase of the price of aggregate supply.'” Usage The preferred measure by the Federal Reserve of core inflation in the United States is the change in the core personal consumption expenditures price index (PCE). This index is based on a ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Consumer Price Index
A consumer price index (CPI) is a price index, the price of a weighted average market basket of consumer goods and services purchased by households. Changes in measured CPI track changes in prices over time. Overview A CPI is a statistical estimate constructed using the prices of a sample of representative items whose prices are collected periodically. Sub-indices and sub-sub-indices can be computed for different categories and sub-categories of goods and services, being combined to produce the overall index with weights reflecting their shares in the total of the consumer expenditures covered by the index. It is one of several price indices calculated by most national statistical agencies. The annual percentage change in a CPI is used as a measure of inflation. A CPI can be used to index (i.e. adjust for the effect of inflation) the real value of wages, salaries, and pensions; to regulate prices; and to deflate monetary magnitudes to show changes in real values. In most ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Trimmed Mean
A truncated mean or trimmed mean is a statistical measure of central tendency, much like the mean and median. It involves the calculation of the mean after discarding given parts of a probability distribution or sample at the high and low end, and typically discarding an equal amount of both. This number of points to be discarded is usually given as a percentage of the total number of points, but may also be given as a fixed number of points. For most statistical applications, 5 to 25 percent of the ends are discarded. For example, given a set of 8 points, trimming by 12.5% would discard the minimum and maximum value in the sample: the smallest and largest values, and would compute the mean of the remaining 6 points. The 25% trimmed mean (when the lowest 25% and the highest 25% are discarded) is known as the interquartile mean. The median can be regarded as a fully truncated mean and is most robust. As with other trimmed estimators, the main advantage of the trimmed mean is ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Inflation Hedge
An inflation hedge is an investment intended to protect the investor against (hedge) a decrease in the purchasing power of money (inflation). There is no investment known to be a successful hedge in all inflationary environments, just as there is no asset class guaranteed to increase in value in non-inflationary times. Inflation can impact investment decisions by making it difficult to predict future prices. This makes it risky to invest in certain assets, such as commodities, that may be impacted by inflation. Inflation can erode the value of investments over time. This is why it is important for investors to consider inflation when making investment decisions. ''Barron's Finance & Investment Handbook'' states: "Traditionally, gold and real estate have a reputation as good inflation hedges, though growth in stocks also can offset inflation in the long run. Money market funds, which pay higher yields as interest rates rise during inflation times, can also be a good inflation he ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Inflationism
Inflationism is a heterodox economic, fiscal, or monetary policy, that predicts that a substantial level of inflation is harmless, desirable or even advantageous. Similarly, inflationist economists advocate for an inflationist policy. Mainstream economics holds that inflation is a necessary evil, and advocates a low, stable level of inflation, and thus is largely opposed to inflationist policies – some inflation is necessary, but inflation beyond a low level is not desirable. However, deflation is often seen as a worse or equal danger, particularly within Keynesian economics, as well as Monetarist economics and in the theory of debt deflation. Inflationism is not accepted within the economics community, and is often conflated with Modern Monetary Theory, which uses similar arguments, especially in relation to chartalism. Political debate In political debate, inflationism is opposed to hard currency, which believes that the real value of currency should be maintained. In late ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Headline Inflation
Headline inflation is a measure of the total inflation within an economy, including commodities such as food and energy prices (e.g., oil and gas), which tend to be much more volatile and prone to inflationary spikes. On the other hand, "core inflation" (also non-food-manufacturing or underlying inflation) is calculated from a consumer price index minus the volatile food and energy components. Headline inflation may not present an accurate picture of an economy's inflationary trend since sector-specific inflationary spikes are unlikely to persist. Uses The European Central Bank and the Bank of England have mandates that spell out their inflation goals in terms of headline inflation. India also focuses on headline inflation. In the United States, however, the Federal Open Market Committee (FOMC) focuses on core inflation—namely the "personal consumption expenditures price index". However, President of the Federal Reserve Bank of St. Louis James B. Bullard explained that the ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Median
In statistics and probability theory, the median is the value separating the higher half from the lower half of a data sample, a population, or a probability distribution. For a data set, it may be thought of as "the middle" value. The basic feature of the median in describing data compared to the mean (often simply described as the "average") is that it is not skewed by a small proportion of extremely large or small values, and therefore provides a better representation of a "typical" value. Median income, for example, may be a better way to suggest what a "typical" income is, because income distribution can be very skewed. The median is of central importance in robust statistics, as it is the most resistant statistic, having a breakdown point of 50%: so long as no more than half the data are contaminated, the median is not an arbitrarily large or small result. Finite data set of numbers The median of a finite list of numbers is the "middle" number, when those numbers are ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Moving Average
In statistics, a moving average (rolling average or running average) is a calculation to analyze data points by creating a series of averages of different subsets of the full data set. It is also called a moving mean (MM) or rolling mean and is a type of finite impulse response filter. Variations include: simple, cumulative, or weighted forms (described below). Given a series of numbers and a fixed subset size, the first element of the moving average is obtained by taking the average of the initial fixed subset of the number series. Then the subset is modified by "shifting forward"; that is, excluding the first number of the series and including the next value in the subset. A moving average is commonly used with time series data to smooth out short-term fluctuations and highlight longer-term trends or cycles. The threshold between short-term and long-term depends on the application, and the parameters of the moving average will be set accordingly. It is also used in economics ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Federal Reserve Bank Of New York
The Federal Reserve Bank of New York is one of the 12 Federal Reserve Banks of the United States. It is responsible for the Second District of the Federal Reserve System, which encompasses the State of New York, the 12 northern counties of New Jersey, Fairfield County in Connecticut, Puerto Rico, and the U.S. Virgin Islands. Located at 33 Liberty Street in Lower Manhattan, it is by far the largest (by assets), the most active (by volume), and the most influential of the Reserve Banks. The Federal Reserve Bank of New York is solely responsible for implementing monetary policy on behalf of the Federal Open Market Committee and acts as the market agent of the entire Federal Reserve System (as it houses the Open Market Trading Desk and manages System Open Market Account). It is also the sole fiscal agent of the U.S. Department of the Treasury, the bearer of the Treasury's General Account, and the custodian of the world's largest gold storage reserve. Aside from these distin ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
US Consumer Price Index
The United States Consumer Price Index (CPI) is a set of consumer price indices calculated by the U.S. Bureau of Labor Statistics (BLS). To be precise, the BLS routinely computes many different CPIs that are used for different purposes. Each is a time series measure of the price of consumer goods and services. The BLS publishes the CPI monthly. Different indices computed by the BLS The BLS started the statistic in 1919. It currently computes thousands of consumer price indices, beginning with monthly average prices for each of 8,018 category-area combinations (211 categories of consumption items in 38 urban geographical areas). They also track how much of each of these category area combinations is in the "market basket" consumed by different groups of people. Different published consumer price indices differ in the weights, including the target consumer group and how frequently the weights are updated. The weights for many indices are modified only in January of even-num ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Inflation
In economics, inflation is an increase in the general price level of goods and services in an economy. When the general price level rises, each unit of currency buys fewer goods and services; consequently, inflation corresponds to a reduction in the purchasing power of money. The opposite of inflation is deflation, a sustained decrease in the general price level of goods and services. The common measure of inflation is the inflation rate, the annualized percentage change in a general price index. As prices do not all increase at the same rate, the consumer price index (CPI) is often used for this purpose. The employment cost index is also used for wages in the United States. Most economists agree that high levels of inflation as well as hyperinflation—which have severely disruptive effects on the real economy—are caused by persistent excessive growth in the money supply. Views on low to moderate rates of inflation are more varied. Low or moderate inflation may be ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Chained Dollars
Chained dollars is a method of adjusting real dollar amounts for inflation over time, to allow the comparison of figures from different years. The U.S. Department of Commerce introduced the chained-dollar measure in 1996. It generally reflects dollar figures computed with 2012 as the base year. Description Chained dollars, also known as "chained consumer price index" or "chained CPI," is a measure of inflation that takes into account changes in consumer behavior in response to changes in prices. It is used to adjust certain economic variables, such as tax brackets and Social Security payments, for inflation. The traditional measure of inflation, known as the "headline CPI," assumes that consumers continue to buy the same basket of goods and services over time, even as prices change. However, in reality, consumers may adjust their spending habits in response to changes in prices. For example, if the price of beef increases, consumers may switch to purchasing chicken instead. The c ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Personal Consumption Expenditures Price Index
The PCE price index (PePP), also referred to as the PCE deflator, PCE price deflator, or the Implicit Price Deflator for Personal Consumption Expenditures (IPD for PCE) by the Bureau of Economic Analysis (BEA) and as the Chain-type Price Index for Personal Consumption Expenditures (CTPIPCE) by the Federal Open Market Committee (FOMC), is a United States-wide indicator of the average increase in prices for all domestic personal consumption. It is benchmarked to a base of 2012 = 100. Using a variety of data including U.S. Consumer Price Index and Producer Price Index prices, it is derived from the largest component of the GDP in the BEA's National Income and Product Accounts, personal consumption expenditures. The personal consumption expenditure (PCE) measure is the component statistic for consumption in gross domestic product (GDP) collected by the United States Bureau of Economic Analysis (BEA). It consists of the actual and imputed expenditures of households and includes da ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
