IDEAS home Printed from https://ideas.repec.org/p/lsu/lsuwpp/2009-07.html
   My bibliography  Save this paper

Inflation Forecast Targeting: A VAR Approach

Author

Abstract

We show how to implement inflation forecast targeting using a VAR model and derive the implied inflation-output variability frontier. Our approach is based on dynamic, stochastic simulations of the average inflation rate over a two-year horizon using the moving average representation of the VAR model. Using real time data over two samples, we estimate the inflation-output variability frontier for the U.S. and show that it has shifted favorably over time. We consider the frequency and nature of the policy interventions required to achieve target inflation in both samples and compare these interventions over time.

Suggested Citation

  • W. Douglas McMillin & James S. Fackler, 2009. "Inflation Forecast Targeting: A VAR Approach," Departmental Working Papers 2009-07, Department of Economics, Louisiana State University.
    • Handle: RePEc:lsu:lsuwpp:2009-07
    as

    Download full text from publisher

    File URL: https://www.lsu.edu/business/economics/files/workingpapers/pap09_07.pdf
    Download Restriction: no
    ---><---

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:lsu:lsuwpp:2009-07. See general information about how to correct material in RePEc.

    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.

    We have no bibliographic references for this item. You can help adding them by using 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 RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: the person in charge (email available below). General contact details of provider: https://edirc.repec.org/data/delsuus.html .

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

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.