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Inflation Analysis: An Overview

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  • Quinn, Terry
  • Kenny, Geoff
  • Meyler, Aidan

Abstract

The purpose of this article is to describe how inflation analysis and forecasting has been carried out in the Bank, with particular emphasis on recent research and the new challenges facing the Bank following the launch of the euro on 1 January 1999. Broadly speaking the approach adopted by the Bank over a number of years has been an eclectic one which combines judgement and a range of formal approaches. The latter include structural models which are strongly influenced by basic macroeconomic theories of the small open economy (SOE), indicator analysis, including a composite leading indicator, and time series methods such as autoregressive integrated moving average (ARIMA), vector autoregressive (VAR) and Bayesian VAR (BVAR) models. The emphasis on particular methodologies has evolved over time but in all cases judgement has played a central role.

Suggested Citation

  • Quinn, Terry & Kenny, Geoff & Meyler, Aidan, 1999. "Inflation Analysis: An Overview," MPRA Paper 11361, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:11361
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    References listed on IDEAS

    as
    1. Browne, F. X., 1984. "The international transmission of inflation to a small open economy under fixed exchange rates and highly interest-sensitive capital flows : An Empirical Analysis," European Economic Review, Elsevier, vol. 25(2), pages 187-212, July.
    2. Meyler, Aidan & Kenny, Geoff & Quinn, Terry, 1998. "Forecasting irish inflation using ARIMA models," MPRA Paper 11359, University Library of Munich, Germany.
    3. Callan, Tim & FitzGerald, John, 1989. "Price Determination in Ireland: Effects of Changes in Exchange Rates and Exchange Rate Regimes," Papers ME179, Economic and Social Research Institute (ESRI).
    4. Geoff Kenny & Donal McGettigan, 1999. "Modelling Traded, Non‐traded and Aggregate Inflation in a Small Open Economy: The Case of Ireland," Manchester School, University of Manchester, vol. 67(1), pages 60-88, January.
    5. Quah, Danny & Vahey, Shaun P, 1995. "Measuring Core Inflation?," Economic Journal, Royal Economic Society, vol. 105(432), pages 1130-1144, September.
    6. Stephen G. Cecchetti, 1997. "Measuring short-run inflation for central bankers," Review, Federal Reserve Bank of St. Louis, issue May, pages 143-155.
    7. Stephen G. Cecchetti, 1995. "Inflation Indicators and Inflation Policy," NBER Chapters, in: NBER Macroeconomics Annual 1995, Volume 10, pages 189-236, National Bureau of Economic Research, Inc.
    8. Enrique Alberola-Ila & Tymo Tyrväinen, 1998. "Is there Scope for Inflation Differentials in EMU? An Empirical Evaluation of the Balassa-Samuelson Model in EMU Countries," Working Papers 9823, Banco de España.
    9. Kenny, Geoff & Meyler, Aidan & Quinn, Terry, 1998. "Bayesian VAR Models for Forecasting Irish Inflation," MPRA Paper 11360, University Library of Munich, Germany.
    10. Thomas Doan & Robert B. Litterman & Christopher A. Sims, 1983. "Forecasting and Conditional Projection Using Realistic Prior Distributions," NBER Working Papers 1202, National Bureau of Economic Research, Inc.
    11. Kenny, Geoff, 1996. "Capacity Utilisation in Irish Manufacturing," Research Technical Papers 2/RT/96, Central Bank of Ireland.
    12. Geoff Kenny & Donal Mcgettigan, 1998. "Exchange rates and import prices for a small open economy: the case of Ireland," Applied Economics, Taylor & Francis Journals, vol. 30(9), pages 1147-1155.
    13. Quinn, Terry & Mawdsley, Andrew, 1996. "Forecasting Irish Inflation: A Composite Leading Indicator," Research Technical Papers 4/RT/96, Central Bank of Ireland.
    14. repec:zbw:bofrdp:1998_015 is not listed on IDEAS
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    Cited by:

    1. Martins Bitans & Dace Slakota & Ivars Tillers, 2001. "Price Dynamics in Latvia - Experience and Future Prospects," Working Papers 2001/01, Latvijas Banka.
    2. Conall MacCoille & Daniel McCoy, 2002. "Economic Adjustment Within EMU - Ireland’s Experience," The Economic and Social Review, Economic and Social Studies, vol. 33(2), pages 179-193.
    3. Eleanor Doyle, 2004. "Exchange rate pass-through in a small open economy: the Anglo-Irish case," Applied Economics, Taylor & Francis Journals, vol. 36(5), pages 443-455.

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    More about this item

    Keywords

    inflation analysis and forecasting; judgement; small open economy; ARIMA; BVAR;
    All these keywords.

    JEL classification:

    • E31 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Price Level; Inflation; Deflation
    • E30 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - General (includes Measurement and Data)
    • E37 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Forecasting and Simulation: Models and Applications

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