Data and Code for: What Do Long Data Tell Us About the Permanent Component of Inflation?

This is the data and Matlab code for the following paper. <br><br>Title: What Do Long Data Tell Us About the Permanent Component of Inflation? <br>Authors: Stephanie Schmitt-Grohe and Martin Uribe<br>AERPP submission, January 2024. <br>Abstract:<br>Is postwar data enough to estimate the permanent component of inflation? We find that the answer is no for episodes of sudden and large inflation spikes like the one observed after the COVID-19 pandemic, because such episodes are rare in that sample (the inflation of the 1980s took 15 years to develop). Prewar data is rich in sudden inflation spikes, thus providing useful information. Estimates using data over the period 1900-2022 predict that the permanent component of inflation increased by only 1.3 percentage points between 2019 and 2022 but by 5.0 percentage points when estimated on 1955-2022 data. <br><br><br>