Abstract
AbstractWe estimate with UK data a Phillips curve model with backward‐looking and forward‐looking methods of determining inflation expectations and with agents switching between these based on their recent performance. We find that, while on average backward‐looking and forward‐looking methods have about equal weight, there are considerable movements in the weight given to each method. We show this model has better in‐sample fit than other Phillips curve models and this is robust to the methodology chosen. The model out‐of‐sample forecasts on certain dates do better than other Phillips curve models and the Atkeson and Ohanian model.
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a callDisclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.
