Michele Lenza, Lucrezia Reichlin, 24 June 2011
Should central banks use the headline measure of inflation or the core measure to track medium-term inflationary pressures? Lorenzo Bini Smaghi, board member of the ECB, recently argued in favour of using headline inflation. This provoked strong opposition from Paul Krugman, amongst others. This column assesses the two sides of the debate.
Full Article: Debating core inflation
Should central banks use the headline measure of inflation or the core measure to track medium-term inflationary pressures? Lorenzo Bini Smaghi, board member of the ECB, recently argued in favour of using headline inflation. This provoked strong opposition from Paul Krugman, amongst others. This column assesses the two sides of the debate.
Full Article: Debating core inflation