Predicting Turning Points in the UK Inflation Cycle
AbstractInflation targeting is an important component of current U.K. economic policy and this paper examines the forecasting of inflation turning points using leading indicators. The authors identify nine complete inflation cycles between 1958 and 1993. Leading indicators are proposed, with composite shorter and longer leading indicators constructed on the basis of data to June 1992. Overall, the composite indicators give clear prior turning point information with relatively few 'false signals.' They exhibit leads at peaks which are generally longer than at troughs; correspondingly, the authors find that inflation troughs are generally more difficult to predict than peaks. Coauthors are R. C. Bladen-Hovell, Denise R. Osborn, Graham Smith, and W. Zhang. Copyright 1995 by Royal Economic Society.
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Bibliographic InfoArticle provided by Royal Economic Society in its journal The Economic Journal.
Volume (Year): 105 (1995)
Issue (Month): 432 (September)
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Postal: Office of the Secretary-General, School of Economics and Finance, University of St. Andrews, St. Andrews, Fife, KY16 9AL, UK
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Other versions of this item:
- Artis, Michael J, 1994. "Predicting Turning Points in the UK Inflation Cycle," CEPR Discussion Papers 880, C.E.P.R. Discussion Papers.
- E31 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Price Level; Inflation; Deflation
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- Hugo Oliveros C., 1998. "Modelos De Duración:Una Aplicación En El Caso De La Inflacíón Y La Tasa De Interés," BORRADORES DE ECONOMIA 003241, BANCO DE LA REPÚBLICA.
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- Francis X. Diebold & Glenn D. Rudebusch, 2001. "Five questions about business cycles," Economic Review, Federal Reserve Bank of San Francisco, pages 1-15.
- Tan, Hao & Mathews, John A., 2010. "Identification and analysis of industry cycles," Journal of Business Research, Elsevier, vol. 63(5), pages 454-462, May.
- Simon Hayes, 2001. "Leading indicator information in UK equity prices: an assessment of economic tracking portfolios," Bank of England working papers 137, Bank of England.
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