Inflation Forecasts Errors in the Czech Republic: Evidence from a Panel of Institutions

Jan Babecký and Jiri Podpiera

Chapter 6 in Evaluation of the Fulfilment of the CNB's Inflation Targets 1998-2007, 2008, pp 77-85 from Czech National Bank, Research Department

Abstract: The results of our empirical analysis rather serve in support of a hypothesis that inflation target undershooting occurs because the economy has been exposed to a series of shocks restraining inflation (the hypothesis of long series of asymmetric shocks) and in part also because the prognostic apparatus has been biased (the hypothesis of skewed sight) as compared to the other institutions. In view of the recent literature dealing with the accuracy of forecasts, which shows that using more models leads to more reliable forecasts (Fildes and Stekler, 2002), it can be argued that the development and application of alternative prediction models would improve forecast accuracy.

Keywords: Evaluation of inflation forecasts; monetary policy; Czech Republic (search for similar items in EconPapers)
JEL-codes: E31 E37 E58 (search for similar items in EconPapers)
Date: 2008
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