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Fourier Transformation on Model Fitting for Pakistan Inflation Rate

Author

Listed:
  • Anam Iqbal
  • Basheer Ahmad
  • Kanwal Iqbal
  • Asad Ali

Abstract

Inflation is one of the serious economic indicators in Pakistan. Inflation can be crawling, walking, running, hyper and stagflation according to nature. To model monthly inflation rate in Pakistan periodogram analysis and frequency domain analysis which is also known as Fourier analysis or spectral analysis is used. After analyzing the data, inflation cycle length is observed and appropriate Fourier series models are fitted to the data. Monthly inflation rate is also analyzed by Auto Regressive Integrated Moving average (ARIMA). Further, models are compared and it is found that Fourier series models are more suitable to forecast inflation rate of Pakistan.

Suggested Citation

  • Anam Iqbal & Basheer Ahmad & Kanwal Iqbal & Asad Ali, 2018. "Fourier Transformation on Model Fitting for Pakistan Inflation Rate," Business and Economic Research, Macrothink Institute, vol. 8(1), pages 84-94, March.
    • Handle: RePEc:mth:ber888:v:8:y:2018:i:1:p:84-94
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    References listed on IDEAS

    as
    1. Ette Harrison Etuk, 2012. "Predicting Inflation Rates Of Nigeria Using A Seasonal Box-Jenkins Model," Journal of Statistical and Econometric Methods, SCIENPRESS Ltd, vol. 1(3), pages 1-3.
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    More about this item

    Keywords

    Inflation; Periodogram; Fourier Series Models; ARIMA Models; Stationarity; Root Mean Square Error; Mean Absolute Error;
    All these keywords.

    JEL classification:

    • R00 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General - - - General
    • Z0 - Other Special Topics - - General

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