Consumer Inflation Research Articles

New forecasting methods for an old problem: Predicting 147 years of systemic financial crises

AbstractThis paper develops new forecasting methods for an old and ongoing problem by employing 13 machine learning algorithms to study 147 years of systemic financial crises across 17 countries. Findings suggest that fixed capital formation is the most important variable. GDP per capita and consumer inflation have increased in prominence whereas debt‐to‐GDP, stock market, and consumption were dominant at the turn of the 20th century. A lag structure and rolling window both improve on optimized contemporaneous and individual country formats. Through a lag structure, banking sector predictors on average describe 28% of the variation in crisis prevalence, the real sector 64%, and the external sector 8%. Nearly half of all algorithms reach peak performance through a lag structure. As measured through AUC, and Brier scores, top‐performing machine learning methods consistently produce high accuracy rates, with both random forests and gradient boosting in front with 77% correct forecasts, and consistently outperform traditional regression algorithms. Learning from other countries improves predictive strength, and non‐linear models generally deliver higher accuracy rates than linear models. Algorithms retaining all variables perform better than those minimizing the influence of variables.

Determining co-movements of tomato prices in the United States and macroeconomic variables in Mexico for 2023

Objective: To analyze the co-movements of macroeconomic variables in Mexico and prices of Mexican tomato exports and to estimate the prices of Mexican tomatoes in American and Canadian supply markets based on Mexican macroeconomic variables. Design/Methodology/Approach: The research was conducted using Pearson's coefficient—calculating the standard scores for X and Y. We determined the co-movements of Mexican tomato market prices and Mexico’s GDP, the Interbank Equilibrium Interest Rate (IEIR), natural gas prices, and consumer inflation. Econometric techniques were thus combined with agricultural sector variables as a reliable precedent of the relation intensity between said variables. Results: The coefficient of determination showed an acceptable degree of linear relationship between the market prices of Mexican tomatoes in different cities and the selected macroeconomic variables, with an average correlation of 20%. We concluded that the variables are not entirely independent since they show a weak linear relationship between them. Study limitations/implications: It is crucial to conduct studies to determine whether the coefficients of determination support linearity or independence between the evaluated macroeconomic variables. Findings/Conclusions: Econometric techniques were combined with agricultural sector variables as a reliable precedent of the relation intensity between said variables. The coefficient of determination showed an acceptable degree of linear relationship between the market prices of tomatoes in different cities and the selected macroeconomic variables. We recommend the creation of a price forecasting model.

Trends in prices of checkpoint inhibitors in the US, 2016-2023.

11075 Background: Checkpoint inhibitors have revolutionized the treatment of several cancers since the first Food and Drug Administration (FDA) approval in 2014. Yet the cost of these drugs remains high, with implications for patient access and healthcare sustainability. We assessed pricing trends for drugs targeting program death-ligand 1 (PD-L1) or programmed cell death protein 1 (PD-1) from 2016-2023. Methods: This study included 6 PD-L1 or PD-1 inhibitors approved through 2019. Quarterly Medicare Part B spending limits, which are based on the average sales prices of drugs from manufacturers to wholesalers or direct purchasers, were collected from public files. To directly compare drugs, prices were converted to prices per month (28 days), based on the FDA-labeled dosage and frequency for metastatic non-small cell lung cancer (NSCLC), a common cancer for which each drug was approved. Prices were adjusted to 2023 dollars using the consumer price index for all urban consumers. Results: In 2016, monthly prices for pembrolizumab ($15,604) and nivolumab ($15,814) were similar. Prices for these 2 drugs and avelumab, approved in 2017, remained within 5% of each other throughout the study period. Three other drugs (cemiplimab, atezolizumab, and durvalumab) were approved from 2016-2018 and had prices 3%-20% lower than the other 3 drugs (Table). Inflation-adjusted prices for all drugs remained stable from 2016-2019 and decreased from 2020-2023, corresponding with a period of higher inflation. In 2023, monthly prices for the 6 drugs ranged from $11,961 (durvalumab) to $15,043 (pembrolizumab). From 2016-2023, inflation-adjusted prices decreased, by an average of 0.7% (pembrolizumab) to 4.8% (cemiplimab) per year. Conclusions: Although the FDA approved 6 mechanistically similar PD-1 or PD-L1 inhibitors from 2014-2018, prices remained generally unchanged during those years and through 2023, with slight declines in real prices attributable to post-COVID consumer inflation. Competition among these brand-name cancer drugs did not meaningfully affect prices. Regulators should investigate why price competition has not emerged, and policymakers should grant more opportunities to negotiate lower prices for patients and the health care system, as is being rolled out this year in Medicare following passage of the Inflation Reduction Act. [Table: see text]

Consumer inflation expectations: Daily dynamics

We use high frequency identification methods to study the response of consumer inflation expectations to many different types of events using data from the Federal Reserve Bank of New York’s Survey of Consumer Expectations. We identify the response of expectations to a large set of shocks, including FOMC meetings and macroeconomic data releases. We find that macroeconomic news and FOMC meetings with a press conference or rate cuts jointly move expectations.

Key Factors Impacting Business Performance an Investigation of Firms in Vietnam

This study examines factors affecting company performance on the Ho Chi Minh Stock Exchange from 2008 to 2020, analyzing internal and external variables, including the Covid-19 pandemic's impact. Using data from 40 firms and macroeconomic indicators, advanced econometric models identify key determinants of Return on Assets (ROA). Findings suggest financial leverage and operating leverage enhance ROA, while asset size and consumer inflation have mixed effects. Industrial production positively correlates with ROA, whereas the pandemic negatively impacts corporate performance. These insights inform strategic management and policy-making for economic resilience.

Indirect consumer inflation expectations: Theory and evidence

Based on indirect utility theory, we ask consumers about the change in their incomes that would be required to offset expected price changes and buy the same amounts of goods and services one year ahead in a large-scale, high-frequency survey of consumers in the US and 14 other countries. Aggregating responses across consumers provides an alternative, indirect measure of inflation expectations compared with conventional, direct measures, but with theoretically lower ex-post forecast errors. The survey responses show that indirect consumer inflation expectations vary based on age, gender, individual inflation experiences, and local shocks. Exploiting rich cross-sectional variation, inflation expectations increase by slightly more in response to gasoline price changes than implied by their expenditure share.

The influence of supermarket prices on consumer inflation expectations

Using data on the inflation expectations of 85 thousand consumers and a unique data set of price changes at Australian supermarkets, we show that consumers form inflation expectations that are excessively influenced by particular elements of the cross-sectional distribution of price changes. The estimates provide novel evidence that the right tail of supermarket price changes, which has largely been ignored in the literature to date, is a material factor in explaining inflation expectations. The right tail of supermarket price changes materially raises inflation expectations, particularly for lower income households, leading to the presence of income-dependence in the expectation formation process. The results shed new light on the informativeness of cross-sectional supermarket price changes for consumer beliefs about inflation.

Central bank communication and expectations: Evidence for inflation‐targeting economies

AbstractWe seek to investigate the effects of communication by central banks on professional and consumer inflation expectations. Accordingly, we investigate 12 small open economies implementing inflation targeting. The communication tone of the central banks is determined based on their post‐decision releases. We use computational linguistics to quantify this factor. With regard to two subsamples that are identified based on the central bank's experience in inflation targeting, we estimate panel models while controlling for other prospective drivers of expectations. The communication tone of a central bank significantly affects the expectations of professional forecasters from economies with more experience in inflation targeting.

РОЗВИТОК БІЗНЕСУ В УМОВАХ ВІЙНИ В УКРАЇНІ

The existence of a problem of conducting business by domestic enterprises due to russia’s military invasion of Ukraine and their reluctance to carry out effective management in the first days of the war is defined in the article. The amount of material damage caused to the national economy, consumer inflation, the level of decline of the national economy, the devaluation of the national currency, which led to the increase in the cost of goods, works and services, are indicated. Characteristic features of the crisis of the enterprise during the war are singled out. Such negative factors of influence on business development as an increase in the level of risk, the complexity of strategic planning and decision-making, the loss of labor force, a decrease in demand, restrictions on access to markets, and an increase in the cost of raw materials, energy, and labor are described. The complexity of the economic situation of agricultural, energy, metallurgical and logistics enterprises, caused by the territorial location and other features characteristic of each type of business, is proved. Despite the complexity of the existing conditions, the development of Ukrainian business, the creation of jobs, the support of the state economy, and the provision of financial assistance to the military were noted. The areas of state support for business are summarized, in particular, new legislative acts and programs for business adaptation to modern realities are indicated, changes in labor and tax legislation regarding the simplification of certain aspects of business activity are described. The government programs and business support initiatives created with the help of the Diya service are characterized, in particular those that help to find employment for a person internally displaced as a result of hostilities during the martial law in Ukraine and to receive compensation from the state for this, to submit an application for receiving free assistance in relocating one’s business to safe regions of the state or participating in a grant competition “is a job” to create, develop or restore one’s own business, or those that contain the necessary information for choosing a financing program, for Ukrainian exporters, and also help businesses communicate effectively with the state, to develop business development strategy and tactics. The main recommendations for overcoming the crisis and business management by applying the anti-crisis management mechanism have been developed. The importance of further legislative changes regarding conducting business with the aim of stabilizing and developing the economy of Ukraine was noted.

Inflation, fiscal policy and inequality: the distributional impact of fiscal measures to compensate for consumer inflation

Inflation, fiscal policy and inequality: the distributional impact of fiscal measures to compensate for consumer inflation

Perceived inflation in the Vietnamese economy: New points in methodology and applications

Researching and developing methods to measure perceived inflation is an indispensable requirement for the monetary policy management of the State Bank of Vietnam, especially in the context of interest rate amplitudes. remains at the lowest level in history in Vietnam. This study was conducted in that context with the goal of developing a tool to measure perceived inflation based on a solid methodological foundation. The result is the creation of a new measure, integrating the psychological 'gain-loss' effect of consumers on price fluctuations. In particular, the final product is an integrated website, allowing automation of the research and analysis process. The results of the study provide evidence of overstated consumer inflation perceptions during periods of economic volatility, when perceived inflation is significantly higher than the headline inflation (CPI). These findings not only have academic value but are also important in supporting the State Bank of Vietnam in evaluating and operating monetary policy, especially in identifying and dealing with fluctuations in perceived inflation in the economy. From the results of this study, we call for participation and suggestions from the experts, with the aim of minimizing the undesirable effects of inflation and supporting the maintenance of a stable inflation rate, contributing to Vietnam’s economic growth in 2024.

Mechanism of regime changes of global inflation in 2012–2023

The paper studies the process of regime changes: from low inflation and interest rates in 2012–2019 to high inflation and even stagflation in 2020–2023. The authors selected eleven countries for analysis: BRICS, USA and Great Britain, and four EU leading states— Germany, France, Spain and Italy. The trends examined in the first period reflect the difficulty in determining (on monthly data) the role of classic factors influencing the inflation processes (by CPIs) — monetary policy and unemployment, with energy and food prices having strong influence in this period. In general, the upturn in 2012–2019 was not too strong and created a rather comfortable (and predictable) environment for low inflation. In the period of shock recession after the COVID lockdowns the speed of consumer inflation in six developed countries had tripled. General inflation was affected by energy and food process and formatted so rapidly that such factors as unemployment and money supply growth turned out irrelevant. Having reached high growth rate, inflation moved wages up and fixed both its rate (one side elasticity) and dynamics. Core inflation index (manufactured goods) grew in parallel with unit labor cost, which entailed cost-push inflation effect. Growing interest rates were designed to slow down inflation by squeezing economic activity, which was not that simple in terms of ULC in the short run.

The distributional impact of fiscal measures to compensate for consumer inflation in Greece in 2022

This paper analyses the distributional implications of consumer inflation in Greece and of the fiscal measures adopted to cushion its adverse impact on households in 2022. The analysis employs the tax-benefit microsimulation model for the European Union (EUROMOD) to study how inflation, income support measures, as well as measures aimed at containing prices affected households’ purchasing power and welfare across the income distribution. The study confirms that the purchasing power of lower-income households was more severely affected by the 2022 inflation surge than that of higher-income households, resulting in the so-called inflation gap. The unequal impact of inflation was further magnified by the high shares of consumption in the income of the poorer, resulting in a welfare loss differential of 9.2 percentage points between the bottom and the top income decile. The adverse distributional impact of the inflationary shock was largely offset by government policies, with a welfare loss of only 2.9% remaining for the population as a whole. Fiscal measures were shown to close the inflation gap and mitigated the welfare loss differential between the poor and the rich to just 0.7 percentage points. Price measures were dominant vis-à-vis their income counterparts in compensating for welfare losses across the income distribution and, most interestingly, had a significant progressive impact largely driven by the electricity subsidy, as the support provided was inversely related to consumption. However, given that they were not as well-targeted to low-income households, they were relatively cost-inefficient when compared with income measures. Nonetheless, the efficiency advantage of income measures may be severely undermined in the presence of extensive tax evasion, which points not only to the need for a careful design of targeted measures, but also to complementarities with structural reforms fighting tax evasion.

Where do they care? The ECB in the media and inflation expectations

ABSTRACT This paper examines how news coverage of the European Central Bank (ECB) affects consumer inflation expectations in the four largest euro area countries. Utilizing a unique dataset of multilingual European news articles, we measure the impact of ECB-related inflation news on inflation expectations. Our results indicate that German and Italian consumers are more attentive to this news, whereas in Spain and France, we observe no significant response. The research underscores the role of national media in disseminating ECB messages and the diverse reactions among consumers in different euro area countries.

Convergence Trends in Euro Economies: Financial Crisis Recovery and the COVID-19 Pandemic

The configurative comparative method, Dynamic Pattern Synthesis (DPS) is used to replicate previous research into the impact of the euro on economic convergence. The DPS method ensures a forensic examination of the diverse variable patterns that influence cluster memberships. As with previous research conclusions, there are multiple patterns of convergence and divergence. Consistent clusters across the time periods compared are Germany, the Netherlands, Luxembourg, and Ireland; Slovakia and Estonia; Italy, Spain, and Slovenia; and Portugal and Greece. The variable patterns most likely to influence cluster definitions are differences in GDP per capita, productivity, and investment, although there are other differing variable patterns that influence specific smaller cluster memberships and the consistency of memberships over time. Externalities undermine nominal convergence. An example is the divergence of the experience of consumer inflation between 2016 and 2022. Nevertheless, some convergence in long-term interest rates is achieved. There is also divergence in the real convergence target of GDP per capita. As regards structural changes, productivity differences widen, and investment as a percentage of GDP converges during COVID-19. The theoretical implications are that the complex dynamics between collaboration, competitive markets, and global instabilities makes convergence unlikely. Real convergence, such as reducing the distribution differences of GDP per capita, is only likely to be possible over many decades, and needs considerable government interventions. Complex systems theory informs us that limits to convergence are inevitable in dynamic systems where events bring unplanned divergences.

Macroeconomic fundamentals and attention: What drives european consumers’ inflation expectations?

Using survey data on consumer inflation expectations in the European Union countries, we investigate the price, macroeconomic, attention, and geopolitical determinants of European consumers’ inflation expectations. We employ panel data regression with both fixed and random effects. We conclude that when consumers in the EU form their expectations regarding future inflation, they are determined not only by past inflation and the general macroeconomic situation, but also by selected attention variables expressing their search queries on the Internet (SVI based on Google Trends), and uncertainty concerning economic policy (EPU) steps and measures. Moreover, our baseline specification also suggests that inflation expectations of consumers in the Central and Eastern European countries are higher than those in Euro Area countries. These findings are robust to multiple specifications using individual survey indicators of expected inflation.

Forecasting Consumer Price Index Expenditure Inflation for Food Ingredients Using Singular Spectrum Analysis

Inflation is an economic problem that significantly impacts the macro economy and people's real income if it occurs continuously. South Sulawesi Province often experienced significant inflation fluctuations during 2005-2019. In 2015, inflation in South Sulawesi reached 3.32%, ranking the highest in Eastern Indonesia. Ten food ingredients played an essential role in influencing inflation that year. However, until now, research on forecasting Consumer Price Index expenditure inflation for food ingredients in South Sulawesi using the Singular Spectrum Analysis method has never been carried out. The novelty in this research lies in using the Singular Spectrum Analysis method, which provides a new contribution to forecasting inflation trends in South Sulawesi and deepens understanding of regional inflation problems. This research aims to forecast consumer price index expenditure inflation for food ingredients in South Sulawesi using the Singular Spectrum Analysis method. This research used CPI expenditure inflation data for food ingredients from the official website of the Central Statistics Agency of South Sulawesi for the monthly period from January 2014 - June 2022. The forecasting results show that the lowest inflation rate is predicted to occur in December 2022 at -0,12%, while the highest level is expected to be reached in May 2023 at 0.43%. Furthermore, the mean absolute percentage error value of 3.54% indicates that the forecasting model has a very good level of accuracy. The results of this forecasting have the potential to be used by economic policymakers in South Sulawesi in designing more effective policies to overcome the problem of inflation, especially in the food ingredients and its impact on society. The practical implications of this research can help improve regional economic stability and community welfare.

Does the monetary policy of the United States affect the consumer price inflation in Russia?

Subject. The economic environment in Russia, similar to other countries, is represented by the consumer price index. It is regulated by the monetary policy of the Central Bank of the Russian Federation. Since Russia participates in international economic relations, its economic environment is affected by the monetary policy of the USA, because this country plays the greatest role in the global economy and the global economic system as a whole. At the moment, the monetary policy of the Federal Reserve System of the USA has a stronger impact on consumer price inflation in Russia than the monetary policy of the Central Bank, because the US economy is significantly larger than the Russian economy. Specifically, an increase in money supply in the USA, required to stimulate economic activity in the country, can accelerate the growth of the consumer price index in our country. It is therefore important to build economic and mathematical models in order to predict the consumer price index in Russia based on the indicators of the CB and the FRS. Purpose. The purpose of our study was to determine the effect of the monetary policy of the CB and the FRS on the consumer price index in Russia and derive multiple autoregression equations in order to predict the consumer inflation rate in our country based on the indicators of the CB and the FRS. Methodology. In our study, we used general and specific scientific methods: analysis, synthesis, and statistical methods (correlation and regression analysis). The study was based on the analysis of relevant scientific literature and economic journals. Conclusions. The study determined that the monetary policy of the FRS directly affects the consumer price index in Russia. It also stresses the need to develop measures aimed at eliminating the side effects of the monetary policy of the FRS in Russia. The article demonstrates a strong negative effect of increased US money supply on the economic situation in Russia and a strong correlation between the M2 money supply in the USA, the US dollar index, and the consumer price index in Russia, as compared to a less significant impact of the key rate of the CB and the M2 money supply in Russia.

Is There an Economic Recession in the United States During COVID-19 from the Perspective of Employment Factor?

In the period of 2019-2020, the economies of all countries have been affected to some extent, with higher unemployment and lower consumer inflation. This paper takes the United States as an example to analyze whether there will be an economic recession in the United States during 2019-2020 from the perspective of unemployment rate and the impact of this recession. In addition, this paper also uses the fitted matched text was also used to test the hypothesis, and it was found that the same trend did appear in the United States during Covid-19 and the recession of 2008. In addition, this paper also gives some suggestions on how to react to this trend in the United States. The study suggests that during the economic recession, the government should not only maintain good inflation rate to stimulate the economy to avoid hyperinflation, but also avoid falling into the trap of low inflation rate.

Automotive dealerships 2019–22: dealer markup increases drive new-vehicle consumer inflation

Automotive dealerships 2019–22: dealer markup increases drive new-vehicle consumer inflation