Advanced Search
MyIDEAS: Login to save this paper or follow this series

The P* model as a general identity to analyze and forecast the behavior of the inflation rate in the economy of Puerto Rico

Contents:

Author Info

  • Carlos A. Rodríguez Ramos
Registered author(s):

    Abstract

    In this work the P* model is used to analyze and forecast the inflation rate in the economy of Puerto Rico. This model is based on two essential points: the first one is to identify the inflationary potential of an economic system through the estimation of the price level to which the inflation tends to adjust in the long run. The second, points that the price level will be adjust, in the long run, to the forecast of the model. Given the way in which the monetary sector in Puerto Rico its constituted, the model needs to complement with U.S.A. monetary variables , such as, monetary supply, to forecast the inflation. The results indicate a long run relationship between the monetary supply of United States (M1) and the price level, the real production and the island s preferential interest rate. The final model is a good representation of the generating process of information (GPI) and it could be used for forecasting purposes. The same predicts the development of inflation better than the two ARIMA models previously selected.

    Download Info

    If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
    File URL: http://www.eeri.eu/documents/wp/EERI_RP_2003_06.pdf
    Download Restriction: no

    Bibliographic Info

    Paper provided by Economics and Econometrics Research Institute (EERI), Brussels in its series EERI Research Paper Series with number EERI_RP_2003_06.

    as in new window
    Length: 12 pages
    Date of creation: Jul 2003
    Date of revision:
    Handle: RePEc:eei:rpaper:eeri_rp_2003_06

    Contact details of provider:
    Postal: Avenue de Beaulieu, 1160 Brussels
    Phone: +322 299 3523
    Fax: +322 299 3523
    Email:
    Web page: http://www.eeri.eu/index.htm
    More information through EDIRC

    Related research

    Keywords: Econometric Modeling; Time Series Analysis; Forecasting Methods; Monetary Economics.;

    Find related papers by JEL classification:

    References

    References listed on IDEAS
    Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
    as in new window
    1. Jeffrey J. Hallman & Richard G. Anderson, 1993. "Has the long-run velocity of M2 shifted? Evidence from the P* model," Economic Review, Federal Reserve Bank of Cleveland, Federal Reserve Bank of Cleveland, issue Q I, pages 14-26.
    2. Arnold, Ivo J. M., 1996. "Stochastic trends in the long-run behavior of velocity: A new test of the institutional hypothesis," Journal of Policy Modeling, Elsevier, Elsevier, vol. 18(6), pages 623-641, December.
    3. Hall, Stephen G & Milne, Alistair, 1994. "The Relevance of P-Star Analysis to UK Monetary Policy," Economic Journal, Royal Economic Society, Royal Economic Society, vol. 104(424), pages 597-604, May.
    4. Kenneth N. Kuttner, 1989. "Monetary and non-monetary sources of inflation: an error correction analysis," Working Paper Series, Macroeconomic Issues, Federal Reserve Bank of Chicago 89-15, Federal Reserve Bank of Chicago.
    5. Hallman, Jeffrey J & Porter, Richard D & Small, David H, 1991. "Is the Price Level Tied to the M2 Monetary Aggregate in the Long Run?," American Economic Review, American Economic Association, American Economic Association, vol. 81(4), pages 841-58, September.
    6. Johansen, Soren, 1988. "Statistical analysis of cointegration vectors," Journal of Economic Dynamics and Control, Elsevier, Elsevier, vol. 12(2-3), pages 231-254.
    Full references (including those not matched with items on IDEAS)

    Citations

    Lists

    This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

    Statistics

    Access and download statistics

    Corrections

    When requesting a correction, please mention this item's handle: RePEc:eei:rpaper:eeri_rp_2003_06. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Julia van Hove).

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If references are entirely missing, you can add them using this form.

    If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.