Forecasting Food Inflation in Developing Countries with Inflation Targeting Regimes

Miguel Gomez, Eliana R. González and Luis Melo-Velandia

American Journal of Agricultural Economics, 2012, vol. 94, issue 1, 153-173

Abstract: Developing countries that employ inflation-targeting monetary policy regimes require accurate short-run food inflation forecasts. We develop a systematic approach to improve food inflation forecasts, apply it to Colombian monthly data from December 1989 to April 2006, and show its relevance for inflation targeting regimes. Forecast accuracy can be improved by: disaggregating food products into away-from-home, processed and fresh foods; employing econometric methods to combine forecasts from individual models; and using flexible least squares methods in the presence of structural changes. We also show the importance of accurate food inflation forecasts in models simulating monetary policy transmission.AMS Subject Classification ,, Copyright 2012, Oxford University Press.

Date: 2012
References: Add references at CitEc
Citations: View citations in EconPapers (6)

Downloads: (external link)
http://hdl.handle.net/10.1093/ajae/aar122 (application/pdf)
Access to full text is restricted to subscribers.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:oup:ajagec:v:94:y:2012:i:1:p:153-173

Access Statistics for this article

American Journal of Agricultural Economics is currently edited by Madhu Khanna, Brian E. Roe, James Vercammen and JunJie Wu

More articles in American Journal of Agricultural Economics from Agricultural and Applied Economics Association Contact information at EDIRC.
Bibliographic data for series maintained by Oxford University Press ().