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Including All

Andersson, Fredrik (2010)
Department of Economics
Abstract
The thesis concerns inflation measuring and investigates how an alternative to the CPI or GDP-deflator inflation measures could be constructed. The theoretical foundations are based on the quantity theory of money. The measure is constructed as a weighted index where the weights are determined through a statistical method that assigns a weight to a good or a group of goods according to its volatility, where a high volatility renders a low weight, since stability is considered to be one of the main features of a inflation measure. The index is then compared to the CPI and the GDP-deflator to see what differences the indices show regarding perceived inflation. All three indices are then put into a Taylor equation to test if a broader... (More)
The thesis concerns inflation measuring and investigates how an alternative to the CPI or GDP-deflator inflation measures could be constructed. The theoretical foundations are based on the quantity theory of money. The measure is constructed as a weighted index where the weights are determined through a statistical method that assigns a weight to a good or a group of goods according to its volatility, where a high volatility renders a low weight, since stability is considered to be one of the main features of a inflation measure. The index is then compared to the CPI and the GDP-deflator to see what differences the indices show regarding perceived inflation. All three indices are then put into a Taylor equation to test if a broader inflation measure would’ve signalled a different monetary policy than the two regular inflation measures. The results were inconclusive, neither supporting nor discarding the broader measurement of inflation. The short conclusion that can be made is that the subject requires more research, especially within the field of statistics and weighting, since one of the biggest problems under the scientific process was the data coverage. (Less)
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author
Andersson, Fredrik
supervisor
organization
year
type
H1 - Master's Degree (One Year)
subject
keywords
inflation, monetary policy, Taylor Rule, inflation measuring, asset prices, Economics, econometrics, economic theory, economic systems, economic policy, Nationalekonomi, ekonometri, ekonomisk teori, ekonomiska system, ekonomisk politik
language
English
id
1614859
date added to LUP
2010-04-14 00:00:00
date last changed
2010-08-03 10:53:09
@misc{1614859,
  abstract     = {The thesis concerns inflation measuring and investigates how an alternative to the CPI or GDP-deflator inflation measures could be constructed. The theoretical foundations are based on the quantity theory of money. The measure is constructed as a weighted index where the weights are determined through a statistical method that assigns a weight to a good or a group of goods according to its volatility, where a high volatility renders a low weight, since stability is considered to be one of the main features of a inflation measure. The index is then compared to the CPI and the GDP-deflator to see what differences the indices show regarding perceived inflation. All three indices are then put into a Taylor equation to test if a broader inflation measure would’ve signalled a different monetary policy than the two regular inflation measures. The results were inconclusive, neither supporting nor discarding the broader measurement of inflation. The short conclusion that can be made is that the subject requires more research, especially within the field of statistics and weighting, since one of the biggest problems under the scientific process was the data coverage.},
  author       = {Andersson, Fredrik},
  keyword      = {inflation,monetary policy,Taylor Rule,inflation measuring,asset prices,Economics, econometrics, economic theory, economic systems, economic policy,Nationalekonomi, ekonometri, ekonomisk teori, ekonomiska system, ekonomisk politik},
  language     = {eng},
  note         = {Student Paper},
  title        = {Including All},
  year         = {2010},
}