Forecasting annual inflation in Suriname

Gavin Ooft, Sailesh Bhaghoe, Philip Hans Franses*

*Corresponding author for this work

Research output: Contribution to journalArticleAcademicpeer-review

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Abstract

For many countries, statistical information on macroeconomic variables is not abundant and, hence, creating forecasts for a key variable like inflation can be cumbersome. This paper addresses the creation of current year forecasts from a MIDAS regression for annual inflation rates in Suriname where monthly inflation rates are the explanatory variables, and where the latter are only available for one and a half decade. The constructed model associates with a hybrid New-Keynesian Philips curve (NKPC). Specific focus is given to the forecast accuracy in the high inflation period in 2016–2017. The forecasts became very accurate when the models included data from May onwards. A particular parameter restriction was also useful to improve forecast accuracy.

Original languageEnglish
Article number101357
JournalJournal of International Financial Markets, Institutions and Money
Volume73
DOIs
Publication statusPublished - 1 Jul 2021

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