A measure of the total inflation within an economy, consisting of core inflation (long-run inflation) and short-term inflation. Core inflation relate to all commodities, services, and goods in an economy in exception of the those with volatile prices such as energy and food.
Top-line inflation differs from core inflation as the latter excludes food and energy prices while calculating inflation. Inflation is calculated by measuring the changes in the cost of living, as observed in relation to the price of a “basket of goods and services” (CPI) used by citizens every day. Top-line inflation refers to all the changes in the values of goods and services, including those of volatile prices.
Therefore, core inflation is less inclusive and more stable than top-line inflation.
Top-line inflation is also known as a headline inflation.
