Predicting Turning Points in the UK Inflation Cycle
AbstractWe set out a reference chronology for annual UK inflation, identifying nine complete cycles between 1958 and 1990. Inflation over this period is asymmetric, falling more quickly than it rises. Leading indicators are also proposed, with composite shorter and longer leading indicators constructed. These exhibit leads at peaks which are generally longer than at troughs. An evaluation of the composite series is also conducted to indicate how they might perform in real time. Overall, they give clear prior turning point information with relatively few `false signals'. Nevertheless, we find that inflation troughs are more difficult to predict than peaks.
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Bibliographic InfoPaper provided by C.E.P.R. Discussion Papers in its series CEPR Discussion Papers with number 880.
Date of creation: Jan 1994
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Other versions of this item:
- Artis, M J, et al, 1995. "Predicting Turning Points in the UK Inflation Cycle," Economic Journal, Royal Economic Society, vol. 105(432), pages 1145-64, September.
- E31 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Price Level; Inflation; Deflation
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