Today, trend inflation is one of the important components of monetary models, as well as an indicator of public confidence in the ongoing monetary policy. In addition, trend inflation is used when forecasting inflation over a long-term horizon. This explains the relevance of this work, which is aimed at illustrating the evolution of trend inflation concept (subject of the study), as well as determination of its place in macroeconomic models. A review of theoretical works analyzing the concept of trend inflation and its relationship with other macroeconomic indicators is aimed at achieving this goal. The study was conducted at the Center for the Study of Central Banking Problems as part of the RANEPA state assignment for 2021 using relevant academic literature and as the major source of information and such methods as descriptive, statistical, graphical analysis, a systematic approach, and comparative analysis. Analysis of trend inflation concept allows the authors to conclude that this indicator represents a longterm inflationary trend and is unobservable. In statistics, prices for food and raw materials characterized by high volatility, as well as the effects of changes in indirect taxes, are excluded from the indicator of general inflation in order to identify a long-term trend in the dynamics

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Published on 03/01/23
Submitted on 26/12/22

Licence: CC BY-NC-SA license

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