Post-COVID inflation dynamics: Higher for longer

IF 3.4 3区 经济学 Q1 ECONOMICS Journal of Forecasting Pub Date : 2024-02-27 DOI:10.1002/for.3070
Randal Verbrugge, Saeed Zaman
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Abstract

We implement a novel nonlinear structural model featuring an empirically successful frequency-dependent and asymmetric Phillips curve; unemployment frequency components interact with three components of core personal consumption expenditures (PCE)—core goods, housing, and core services ex-housing—and a variable capturing supply shocks. Forecast tests verify accuracy in its unemployment–inflation trade-offs, crucial for monetary policy. Using this model, we assess the plausibility of the December 2022 Summary of Economic Projections (SEP). By 2025Q4, the SEP projects 2.1% inflation; however, conditional on the SEP unemployment path, we project 2.9%. A fairly deep recession delivers the SEP inflation path, but a simple welfare analysis rejects this outcome.

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后 COVID 通胀动态:长期走高
我们建立了一个新颖的非线性结构模型,该模型具有经验上成功的频率依赖型非对称菲利普斯曲线;失业频率成分与核心个人消费支出(PCE)的三个成分--核心商品、住房和除住房外的核心服务--以及一个捕捉供给冲击的变量相互作用。预测测试验证了失业-通胀权衡的准确性,这对货币政策至关重要。利用该模型,我们评估了 2022 年 12 月《经济预测摘要》(SEP)的合理性。到 2025 年第四季度,《经济预测摘要》预测通胀率为 2.1%;但在《经济预测摘要》失业率路径的条件下,我们预测通胀率为 2.9%。相当严重的经济衰退会带来 SEP 预测的通胀路径,但简单的福利分析否定了这一结果。
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来源期刊
CiteScore
5.40
自引率
5.90%
发文量
91
期刊介绍: The Journal of Forecasting is an international journal that publishes refereed papers on forecasting. It is multidisciplinary, welcoming papers dealing with any aspect of forecasting: theoretical, practical, computational and methodological. A broad interpretation of the topic is taken with approaches from various subject areas, such as statistics, economics, psychology, systems engineering and social sciences, all encouraged. Furthermore, the Journal welcomes a wide diversity of applications in such fields as business, government, technology and the environment. Of particular interest are papers dealing with modelling issues and the relationship of forecasting systems to decision-making processes.
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