Adjusting Median and Trimmed-Mean Inflation Rates for Bias Based on Skewness
Median and trimmed-mean inflation rates tend to be useful estimates of trend inflation over long periods, but they can exhibit persistent departures from the underlying trend over shorter horizons. In this Commentary, we document that the extent of this bias is related to the degree of skewness in t...
Gespeichert in:
| Veröffentlicht in: | Economic commentary (Cleveland) 2022-03 (2022-05), p.1-7 |
|---|---|
| Hauptverfasser: | , , |
| Format: | Artikel |
| Sprache: | eng |
| Schlagworte: | |
| Online-Zugang: | Volltext |
| Tags: |
Tag hinzufügen
Keine Tags, Fügen Sie den ersten Tag hinzu!
|
| container_end_page | 7 |
|---|---|
| container_issue | 2022-05 |
| container_start_page | 1 |
| container_title | Economic commentary (Cleveland) |
| container_volume | |
| creator | Rich, Robert Verbrugge, Randal Reiman, Saeed |
| description | Median and trimmed-mean inflation rates tend to be useful estimates of trend inflation over long periods, but they can exhibit persistent departures from the underlying trend over shorter horizons. In this Commentary, we document that the extent of this bias is related to the degree of skewness in the distribution of price changes. The shift in the skewness of the cross-sectional price change distribution during the pandemic means that median PCE and trimmed-mean PCE inflation rates have recently been understating the trend in PCE inflation by about 15 and 35 basis points, respectively. |
| doi_str_mv | 10.26509/frbc-ec-202205 |
| format | Article |
| fullrecord | <record><control><sourceid>gale_proqu</sourceid><recordid>TN_cdi_proquest_reports_2645532967</recordid><sourceformat>XML</sourceformat><sourcesystem>PC</sourcesystem><galeid>A745679514</galeid><sourcerecordid>A745679514</sourcerecordid><originalsourceid>FETCH-LOGICAL-c2225-e5758edfd1f1bb1c745d1c6f37df81e9707276c701559a4a654e0d49f8e6334b3</originalsourceid><addsrcrecordid>eNptkctLxDAQxosouK6evRbP1s2jSdrjKr5gRfBxDmkyqVm76ZrpIv73VteDgsxhho_fzMD3ZdkxJWdMClLPfGpsAbZghDEidrIJo5IXXPFq99e8nx0gLgkhVAk1yRZzt9zgEGKb34ELJuYmuvwphdUKXHEHo3AbfWeG0Mf8wQyAue9Tfh4M5ucGweWj_vgK7xEQD7M9bzqEo58-zZ6vLp8uborF_fXtxXxRWMaYKEAoUYHzjnraNNSqUjhqpefK-YpCrYhiSlpFqBC1KY0UJRBX1r4CyXnZ8Gl2sr27Tv3bBnDQCdZ9GlAzWQrBWS3VCBVbqDUd6BB9PyRjW4iQTNdH8GGU5-NvqWpBy5E_-4cfy8Eq2H8XTn8tNBsMXx6EiKF9GbA1G8S_-GyL29QjJvB6Pbps0oemRH8nqL8S1GD1NkH-CXyijRs</addsrcrecordid><sourcetype>Aggregation Database</sourcetype><iscdi>true</iscdi><recordtype>article</recordtype><pqid>2645532967</pqid></control><display><type>article</type><title>Adjusting Median and Trimmed-Mean Inflation Rates for Bias Based on Skewness</title><source>Elektronische Zeitschriftenbibliothek - Frei zugängliche E-Journals</source><source>Alma/SFX Local Collection</source><creator>Rich, Robert ; Verbrugge, Randal ; Reiman, Saeed</creator><creatorcontrib>Rich, Robert ; Verbrugge, Randal ; Reiman, Saeed</creatorcontrib><description>Median and trimmed-mean inflation rates tend to be useful estimates of trend inflation over long periods, but they can exhibit persistent departures from the underlying trend over shorter horizons. In this Commentary, we document that the extent of this bias is related to the degree of skewness in the distribution of price changes. The shift in the skewness of the cross-sectional price change distribution during the pandemic means that median PCE and trimmed-mean PCE inflation rates have recently been understating the trend in PCE inflation by about 15 and 35 basis points, respectively.</description><identifier>ISSN: 2163-3738</identifier><identifier>ISSN: 0428-1276</identifier><identifier>EISSN: 2163-3738</identifier><identifier>DOI: 10.26509/frbc-ec-202205</identifier><language>eng</language><publisher>Cleveland: Federal Reserve Bank of Cleveland</publisher><subject>Analysis ; Average ; Estimates ; Forecasts and trends ; Inflation ; Inflation (Finance) ; Inflation rates ; Noise ; Pandemics ; Prices ; Skewness ; Supply chains ; United States</subject><ispartof>Economic commentary (Cleveland), 2022-03 (2022-05), p.1-7</ispartof><rights>COPYRIGHT 2022 Federal Reserve Bank of Cleveland</rights><rights>Copyright Federal Reserve Bank of Cleveland Mar 24, 2022</rights><oa>free_for_read</oa><woscitedreferencessubscribed>false</woscitedreferencessubscribed><cites>FETCH-LOGICAL-c2225-e5758edfd1f1bb1c745d1c6f37df81e9707276c701559a4a654e0d49f8e6334b3</cites><orcidid>0000-0001-8323-9153 ; 0000-0002-2482-072X ; 0000-0003-0276-447X</orcidid></display><links><openurl>$$Topenurl_article</openurl><openurlfulltext>$$Topenurlfull_article</openurlfulltext><thumbnail>$$Tsyndetics_thumb_exl</thumbnail><link.rule.ids>312,314,776,780,787,27901,27902</link.rule.ids></links><search><creatorcontrib>Rich, Robert</creatorcontrib><creatorcontrib>Verbrugge, Randal</creatorcontrib><creatorcontrib>Reiman, Saeed</creatorcontrib><title>Adjusting Median and Trimmed-Mean Inflation Rates for Bias Based on Skewness</title><title>Economic commentary (Cleveland)</title><description>Median and trimmed-mean inflation rates tend to be useful estimates of trend inflation over long periods, but they can exhibit persistent departures from the underlying trend over shorter horizons. In this Commentary, we document that the extent of this bias is related to the degree of skewness in the distribution of price changes. The shift in the skewness of the cross-sectional price change distribution during the pandemic means that median PCE and trimmed-mean PCE inflation rates have recently been understating the trend in PCE inflation by about 15 and 35 basis points, respectively.</description><subject>Analysis</subject><subject>Average</subject><subject>Estimates</subject><subject>Forecasts and trends</subject><subject>Inflation</subject><subject>Inflation (Finance)</subject><subject>Inflation rates</subject><subject>Noise</subject><subject>Pandemics</subject><subject>Prices</subject><subject>Skewness</subject><subject>Supply chains</subject><subject>United States</subject><issn>2163-3738</issn><issn>0428-1276</issn><issn>2163-3738</issn><fulltext>true</fulltext><rsrctype>article</rsrctype><creationdate>2022</creationdate><recordtype>article</recordtype><sourceid>N95</sourceid><sourceid>BENPR</sourceid><recordid>eNptkctLxDAQxosouK6evRbP1s2jSdrjKr5gRfBxDmkyqVm76ZrpIv73VteDgsxhho_fzMD3ZdkxJWdMClLPfGpsAbZghDEidrIJo5IXXPFq99e8nx0gLgkhVAk1yRZzt9zgEGKb34ELJuYmuvwphdUKXHEHo3AbfWeG0Mf8wQyAue9Tfh4M5ucGweWj_vgK7xEQD7M9bzqEo58-zZ6vLp8uborF_fXtxXxRWMaYKEAoUYHzjnraNNSqUjhqpefK-YpCrYhiSlpFqBC1KY0UJRBX1r4CyXnZ8Gl2sr27Tv3bBnDQCdZ9GlAzWQrBWS3VCBVbqDUd6BB9PyRjW4iQTNdH8GGU5-NvqWpBy5E_-4cfy8Eq2H8XTn8tNBsMXx6EiKF9GbA1G8S_-GyL29QjJvB6Pbps0oemRH8nqL8S1GD1NkH-CXyijRs</recordid><startdate>20220324</startdate><enddate>20220324</enddate><creator>Rich, Robert</creator><creator>Verbrugge, Randal</creator><creator>Reiman, Saeed</creator><general>Federal Reserve Bank of Cleveland</general><scope>AAYXX</scope><scope>CITATION</scope><scope>N95</scope><scope>XI7</scope><scope>0U~</scope><scope>1-H</scope><scope>3V.</scope><scope>4S-</scope><scope>4T-</scope><scope>7WY</scope><scope>7WZ</scope><scope>7XB</scope><scope>87Z</scope><scope>885</scope><scope>8AO</scope><scope>8FK</scope><scope>8FL</scope><scope>ABUWG</scope><scope>AFKRA</scope><scope>ANIOZ</scope><scope>BENPR</scope><scope>BEZIV</scope><scope>CCPQU</scope><scope>DWQXO</scope><scope>FRAZJ</scope><scope>FRNLG</scope><scope>F~G</scope><scope>K60</scope><scope>K6~</scope><scope>L.-</scope><scope>L.0</scope><scope>M0C</scope><scope>M1F</scope><scope>PQBIZ</scope><scope>PQBZA</scope><scope>PQEST</scope><scope>PQQKQ</scope><scope>PQUKI</scope><scope>PYYUZ</scope><scope>Q9U</scope><scope>S0X</scope><orcidid>https://orcid.org/0000-0001-8323-9153</orcidid><orcidid>https://orcid.org/0000-0002-2482-072X</orcidid><orcidid>https://orcid.org/0000-0003-0276-447X</orcidid></search><sort><creationdate>20220324</creationdate><title>Adjusting Median and Trimmed-Mean Inflation Rates for Bias Based on Skewness</title><author>Rich, Robert ; Verbrugge, Randal ; Reiman, Saeed</author></sort><facets><frbrtype>5</frbrtype><frbrgroupid>cdi_FETCH-LOGICAL-c2225-e5758edfd1f1bb1c745d1c6f37df81e9707276c701559a4a654e0d49f8e6334b3</frbrgroupid><rsrctype>articles</rsrctype><prefilter>articles</prefilter><language>eng</language><creationdate>2022</creationdate><topic>Analysis</topic><topic>Average</topic><topic>Estimates</topic><topic>Forecasts and trends</topic><topic>Inflation</topic><topic>Inflation (Finance)</topic><topic>Inflation rates</topic><topic>Noise</topic><topic>Pandemics</topic><topic>Prices</topic><topic>Skewness</topic><topic>Supply chains</topic><topic>United States</topic><toplevel>online_resources</toplevel><creatorcontrib>Rich, Robert</creatorcontrib><creatorcontrib>Verbrugge, Randal</creatorcontrib><creatorcontrib>Reiman, Saeed</creatorcontrib><collection>CrossRef</collection><collection>Gale Business: Insights</collection><collection>Business Insights: Essentials</collection><collection>Global News & ABI/Inform Professional</collection><collection>Trade PRO</collection><collection>ProQuest Central (Corporate)</collection><collection>BPIR.com Limited</collection><collection>Docstoc</collection><collection>ABI/INFORM Collection</collection><collection>ABI/INFORM Global (PDF only)</collection><collection>ProQuest Central (purchase pre-March 2016)</collection><collection>ABI/INFORM Global (Alumni Edition)</collection><collection>Banking Information Database (Alumni Edition)</collection><collection>ProQuest Pharma Collection</collection><collection>ProQuest Central (Alumni) (purchase pre-March 2016)</collection><collection>ABI/INFORM Collection (Alumni Edition)</collection><collection>ProQuest Central (Alumni Edition)</collection><collection>ProQuest Central UK/Ireland</collection><collection>Accounting, Tax & Banking Collection</collection><collection>ProQuest Central</collection><collection>Business Premium Collection</collection><collection>ProQuest One Community College</collection><collection>ProQuest Central Korea</collection><collection>Accounting, Tax & Banking Collection (Alumni)</collection><collection>Business Premium Collection (Alumni)</collection><collection>ABI/INFORM Global (Corporate)</collection><collection>ProQuest Business Collection (Alumni Edition)</collection><collection>ProQuest Business Collection</collection><collection>ABI/INFORM Professional Advanced</collection><collection>ABI/INFORM Professional Standard</collection><collection>ABI/INFORM Global</collection><collection>Banking Information Database</collection><collection>ProQuest One Business</collection><collection>ProQuest One Business (Alumni)</collection><collection>ProQuest One Academic Eastern Edition (DO NOT USE)</collection><collection>ProQuest One Academic</collection><collection>ProQuest One Academic UKI Edition</collection><collection>ABI/INFORM Collection China</collection><collection>ProQuest Central Basic</collection><collection>SIRS Editorial</collection><jtitle>Economic commentary (Cleveland)</jtitle></facets><delivery><delcategory>Remote Search Resource</delcategory><fulltext>fulltext</fulltext></delivery><addata><au>Rich, Robert</au><au>Verbrugge, Randal</au><au>Reiman, Saeed</au><format>journal</format><genre>article</genre><ristype>JOUR</ristype><atitle>Adjusting Median and Trimmed-Mean Inflation Rates for Bias Based on Skewness</atitle><jtitle>Economic commentary (Cleveland)</jtitle><date>2022-03-24</date><risdate>2022</risdate><issue>2022-05</issue><spage>1</spage><epage>7</epage><pages>1-7</pages><issn>2163-3738</issn><issn>0428-1276</issn><eissn>2163-3738</eissn><abstract>Median and trimmed-mean inflation rates tend to be useful estimates of trend inflation over long periods, but they can exhibit persistent departures from the underlying trend over shorter horizons. In this Commentary, we document that the extent of this bias is related to the degree of skewness in the distribution of price changes. The shift in the skewness of the cross-sectional price change distribution during the pandemic means that median PCE and trimmed-mean PCE inflation rates have recently been understating the trend in PCE inflation by about 15 and 35 basis points, respectively.</abstract><cop>Cleveland</cop><pub>Federal Reserve Bank of Cleveland</pub><doi>10.26509/frbc-ec-202205</doi><tpages>7</tpages><orcidid>https://orcid.org/0000-0001-8323-9153</orcidid><orcidid>https://orcid.org/0000-0002-2482-072X</orcidid><orcidid>https://orcid.org/0000-0003-0276-447X</orcidid><oa>free_for_read</oa></addata></record> |
| fulltext | fulltext |
| identifier | ISSN: 2163-3738 |
| ispartof | Economic commentary (Cleveland), 2022-03 (2022-05), p.1-7 |
| issn | 2163-3738 0428-1276 2163-3738 |
| language | eng |
| recordid | cdi_proquest_reports_2645532967 |
| source | Elektronische Zeitschriftenbibliothek - Frei zugängliche E-Journals; Alma/SFX Local Collection |
| subjects | Analysis Average Estimates Forecasts and trends Inflation Inflation (Finance) Inflation rates Noise Pandemics Prices Skewness Supply chains United States |
| title | Adjusting Median and Trimmed-Mean Inflation Rates for Bias Based on Skewness |
| url | https://sfx.bib-bvb.de/sfx_tum?ctx_ver=Z39.88-2004&ctx_enc=info:ofi/enc:UTF-8&ctx_tim=2025-02-02T14%3A10%3A01IST&url_ver=Z39.88-2004&url_ctx_fmt=infofi/fmt:kev:mtx:ctx&rfr_id=info:sid/primo.exlibrisgroup.com:primo3-Article-gale_proqu&rft_val_fmt=info:ofi/fmt:kev:mtx:journal&rft.genre=article&rft.atitle=Adjusting%20Median%20and%20Trimmed-Mean%20Inflation%20Rates%20for%20Bias%20Based%20on%20Skewness&rft.jtitle=Economic%20commentary%20(Cleveland)&rft.au=Rich,%20Robert&rft.date=2022-03-24&rft.issue=2022-05&rft.spage=1&rft.epage=7&rft.pages=1-7&rft.issn=2163-3738&rft.eissn=2163-3738&rft_id=info:doi/10.26509/frbc-ec-202205&rft_dat=%3Cgale_proqu%3EA745679514%3C/gale_proqu%3E%3Curl%3E%3C/url%3E&disable_directlink=true&sfx.directlink=off&sfx.report_link=0&rft_id=info:oai/&rft_pqid=2645532967&rft_id=info:pmid/&rft_galeid=A745679514&rfr_iscdi=true |