Core Inflation: Concepts and Estimates for Macao

Research on inflation measures is always of great interest to economists and policymakers. In particular, temporary fluctuations in prices could distort real price signals, resulting in misallocation of resources and mismanagement of economic policies. Until now, core inflation has remained as the most popular gauge for underlying inflation pressure. This paper reviews the reasons why some economies use core inflation as the target for their monetary policies and estimates core inflation of Macao in recent years