Core inflation represents the long run trend in the price level. In measuring long run inflation, transitory price changes should be excluded. One way of accomplishing this is by excluding items frequently subject to volatile prices, like food and energy. Headline inflation also called as WPI inflation is a measure of the total inflation within an economy and is affected by areas of the market which may experience sudden inflationary spikes such as food or energy. As a result, headline inflation may not present an accurate picture of the current state of the economy as it doesnt take account of service sector. It is also called Top-line inflation. This differs from core inflation (also called non-food-manufacturing inflation or underlying inflation), which excludes factors such as food and energy costs.
Posted on: Thu, 28 Aug 2014 17:27:28 +0000
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