Inflation in Portugal Through the Lens of the Fair Model

Pedro Bação and José Diogo Silva ()
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José Diogo Silva: Univ Coimbra, Faculty of Economics

Notas Económicas, 2023, issue 57, 87-97

Abstract: This study delves into the dynamics of inflation in Portugal, employing a cost-push model as the analytical framework. The model is estimated using data from 2000Q2 to 2020Q1, a period predating the onset of the COVID-19 pandemic and the surge in inflation. We then produce forecasts spanning from 2020Q2 to 2023Q2. The forecasts hint strongly at a structural break during this latter period, implying that the model offers insufficient representation of inflation dynamics in Portugal. We conclude with a discussion of the model's strengths and limitations in understanding inflation dynamics, shedding light on critical aspects that impact its explanatory power.

Keywords: Cost push; econometric modeling; Fair model; forecasting; inflation. (search for similar items in EconPapers)
JEL-codes: E17 E31 E37 (search for similar items in EconPapers)
Date: 2023
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Persistent link: https://EconPapers.repec.org/RePEc:gmf:journl:y:2023:i:57:p:87:97

DOI: 10.14195/2183-203X_57_4

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