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Real output and unit labor costs as predictors of inflation

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  • Yash P. Mehra

Abstract

Granger-causality tests used here find that: [1] unit labor costs add no predictive power to inflation forecasts; and [2] the gap between actual and potential output does help predict inflation, but only in the short run.

Suggested Citation

  • Yash P. Mehra, 1990. "Real output and unit labor costs as predictors of inflation," Economic Review, Federal Reserve Bank of Richmond, vol. 76(Jul), pages 31-39.
    • Handle: RePEc:fip:fedrer:y:1990:i:jul:p:31-39:n:v.76no.4
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    File URL: https://fraser.stlouisfed.org/files/docs/publications/frbrichreview/rev_frbrich199007.pdf
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    Cited by:

    1. Todd E. Clark & Michael W. McCracken, 2009. "Combining Forecasts from Nested Models," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 71(3), pages 303-329, June.

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