NY Times Columnist Puts Former Fed Governor’s Core Inflation Thesis To The Test

Wednesday, March 30, 2011 07:23
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NY Times Columnist Puts Former Fed Governor’s Core Inflation Thesis To The Test

Tags: inflation

When a former Federal Reserve official said core inflation is a reliable predictor of future inflation despite the fact that it leaves out oil and food prices, a New York Times columnist decided to check the data.

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Many people are skeptical of the government’s core inflation measure because it leaves out the two factors that seem to affect our bank accounts the most, oil and food. But former Fed Governor Laurence Meyer wrote an op-ed last week arguing that core inflation is the right measure.


So columnist David Leonhardt plugged the numbers into a spreadsheet to see what history tells us, and the result is an interesting article that backs up Meyer’s argument.
 

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