Forecasting Inflation with Fundamentals ... It's Hard!

Abstract

Controlling inflation is at the core of monetary policymaking, and central bankers would like to have access to reliable inflation forecasts to assess their progress in achieving this goal. Producing accurate inflation forecasts, however, turns out not to be a trivial exercise. This posts reviews the key challenges in inflation forecasting and discusses some recent developments that attempt to deal with these challenges.

Citation

Groen, J. J. J. (2014), “Forecasting Inflation with Fundamentals … It’s Hard!” Liberty Street Economics, November 5 2014, Federal Reserve Bank of New York.