House Prices in the Measurement of Inflation: An Application Using Irish Data

Authors

Róisín O'Sullivan, Smith CollegeFollow

Document Type

Article

Publication Date

Fall 2005

Publication Title

The Economic and Social Review

Abstract

This paper illustrates the impact on Irish inflation of including a house-price series with the current components of the harmonised index of consumer prices (HICP). We construct a dynamic factor index of inflation that weights the individual price series according to the strength of their signal about the common trend in prices. As the relatively noisy house-price series attracts a weight of only 3 per cent in the index, the inclusion of house prices in this way does not hugely alter the recent pattern of inflation for Ireland, despite house prices exhibiting much stronger growth on average than the current measure of consumer prices.

Volume

36

Issue

2

First Page

157

Last Page

178

Comments

Archived as published.

Open access, PKP (Public Knowledge Project)

Recommended Citation

O'Sullivan, Róisín, "House Prices in the Measurement of Inflation: An Application Using Irish Data" (2005). Economics: Faculty Publications, Smith College, Northampton, MA.
https://scholarworks.smith.edu/eco_facpubs/36