Forecasting Inflation in China
Aaron N. Mehrotra
Bank for International Settlements (BIS)
José R. Sánchez-Fung
Kingston University - School of Economics
January 27, 2008
BOFIT Discussion Paper No. 2/2008
This paper forecasts inflation in China over a 12-month horizon. The analysis runs 15 alternative models and finds that only those considering many predictors via a principal component display a better relative forecasting performance than the univariate benchmark.
Number of Pages in PDF File: 17
Keywords: inflation forecasting, data-rich environment, principal components, China
JEL Classification: C53, E31working papers series
Date posted: April 17, 2008
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