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Inflation projections for monetary policy decision making

Author

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  • Álvarez, Luis J.
  • Sánchez, Isabel

Abstract

Many central banks set inflation targets over the medium term and inflation projections are a key input for monetary policy decision making. In this paper, we present the procedures used by the Spanish Central Bank staff to project consumer price inflation. We also provide some illustrations of their policy uses, such as fan charts, deflation probabilities and the monitoring of inflation targets.

Suggested Citation

  • Álvarez, Luis J. & Sánchez, Isabel, 2019. "Inflation projections for monetary policy decision making," Journal of Policy Modeling, Elsevier, vol. 41(4), pages 568-585.
    • Handle: RePEc:eee:jpolmo:v:41:y:2019:i:4:p:568-585
    DOI: 10.1016/j.jpolmod.2018.09.005
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    References listed on IDEAS

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    More about this item

    Keywords

    Inflation; Monetary policy; Phillips curves; Deflation; Targets;
    All these keywords.

    JEL classification:

    • C53 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Forecasting and Prediction Models; Simulation Methods
    • E31 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Price Level; Inflation; Deflation
    • E37 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Forecasting and Simulation: Models and Applications

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