Arbeitspapier
Inflation as a global phenomenon: Some implications for policy analysis and forecasting
We evaluate the performance of inflation forecasts based on the open-economy Phillips curve by exploiting the spatial pattern of international propagation of inflation. We model these spatial linkages using global inflation and either domestic slack or oil price fluctuations, motivated by a novel interpretation of the forecasting implications of the workhorse open-economy New Keynesian model (Martínez-García and Wynne (2010), Kabukcuoglu and Martínez-García (2014)). We find that incorporating spatial interactions yields significantly more accurate forecasts of local inflation in 14 advanced countries (including the U.S.) than a simple autoregressive model that captures only the temporal dimension of the inflation dynamics.
- Language
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Englisch
- Bibliographic citation
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Series: Working Paper ; No. 1520
- Classification
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Wirtschaft
Single Equation Models; Single Variables: Cross-Sectional Models; Spatial Models; Treatment Effect Models; Quantile Regressions
Single Equation Models; Single Variables: Panel Data Models; Spatio-temporal Models
Forecasting Models; Simulation Methods
Open Economy Macroeconomics
Economic Impacts of Globalization: Macroeconomic Impacts
- Subject
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Inflation Dynamics
Open-Economy Phillips Curve
Forecasting
- Event
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Geistige Schöpfung
- (who)
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Kabukçuoğlu, Ayşe
Martínez-García, Enrique
- Event
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Veröffentlichung
- (who)
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Koç University-TÜSİAD Economic Research Forum (ERF)
- (where)
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Istanbul
- (when)
-
2015
- Handle
- Last update
-
10.03.2025, 11:44 AM CET
Data provider
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. If you have any questions about the object, please contact the data provider.
Object type
- Arbeitspapier
Associated
- Kabukçuoğlu, Ayşe
- Martínez-García, Enrique
- Koç University-TÜSİAD Economic Research Forum (ERF)
Time of origin
- 2015
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