Question

Economists sometimes exclude food and energy prices from the “headline” consumer price index and use the resulting “core” price measure to assess inflation prospects. For the period since 1990, plot on one graph the percent change from a year ago of the consumer price index (FRED code: CPIAUCSL) and the percent change from a year ago of the consumer price index excluding food and energy (FRED code: CPILFESL) Visually compare the variability of these two measures of inflation. Why might ex-food-and-energy inflation be a better predictor of future inflation?



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  • CreatedOctober 02, 2014
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