Forecasting Inflation in Times of Stability and Crisis: A Machine Learning Approach

Mauricio Mora Barrenechea
Additional contact information
Mauricio Mora Barrenechea: Independent researcher

Revista Latinoamericana de Desarrollo Economico, 2025, vol. 23, issue 44, 65-107

Abstract: The Bolivian economy is undergoing its most severe crisis since the 1980s, marked by a dramatic transition from low and stable inflation to pronounced inflationary pressures. In this context, the development of reliable forecasting tools has become increasingly critical. This study evaluates the predictive performance of several widely used Machine Learning (ML) models under two distinct macroeconomic conditions: periods of relative stability and periods of crisis. The findings reveal that ML models in general outperform traditional econometric approaches across both conditions, with the XGBoost algorithm demonstrating the best performance. Additionally, it was found that incorporating a broader set of macroeconomic indicators enhances forecast accuracy. These results suggest that ML techniques can serve as valuable complements to econometric models in macroeconomic forecasting, particularly in complex environments such as Bolivia’s.

Keywords: Machine Learning; inflation; forecasting; crisis (search for similar items in EconPapers)
JEL-codes: C14 C22 C32 C53 C55 E31 E37 (search for similar items in EconPapers)
Date: 2025
References: Add references at CitEc
Citations:

Downloads: (external link)
https://iisec.ucb.edu.bo/publicacion/forecasting-i ... ne-learning-approach Full text

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:ris:revlde:022039

DOI: 10.35319/lajed.202544578

Access Statistics for this article

Revista Latinoamericana de Desarrollo Economico is currently edited by Carlos Gustavo Machicado

More articles in Revista Latinoamericana de Desarrollo Economico from Carrera de Economía de la Universidad Católica Boliviana (UCB) Universidad Católica Boliviana. Contact information at EDIRC.
Bibliographic data for series maintained by Carlos Gustavo Machicado ().